Projektziel

While union participation is influenced by economic, social and institutional variables, it is taken as given in the economic literature. Our project aims to develop a novel macroeconomic framework with an endogenous union participation to evaluating the feedback effects between union participation, income distribution and macroeconomic dynamics under different institutional and economic regimes.

Projektbeschreibung

Kontext

The decline of labour unions (especially in the US) can be explained by the fact that the transition from an industrial to a service economy took place in an “era of conservative politics”, where workers who wanted to resist inadequate working conditions in new and fast-growing service companies and considered forming representative bodies and unions faced ‘intimidation, threats, coercion and anti-union propaganda’ (Krugman, 2021, p. A23). Additionally, structural change has a secondary effect on wages via its impact on union density in the total economy. A shrinking manufacturing sector, where trade union density compared to other sectors is high, reduces the percentage of employed workers who are union members in the workforce. Finally, yet importantly, there is the general trend toward individualization in modern societies (which, of course, also has something to do with the political environment), making it difficult for unions to attract new members.

Fragestellung

Our project consists of three parts. First, an empirical analysis of the factors influencing workers’ decisions to join a trade union that extends the recent work by Schnabel (2020) by explicitly focusing on countries’ institutional and other key economic characteristics related to a gender perspective and Varieties of Capitalism and growth regimes. Second, the incorporation of microeconomic decisions of unionisation into a novel macroeconomic framework along the lines of the Bielefeld School (see e.g. Flaschel et al. 2012). Using our new framework, we will be able to study the interactions between unionisation, economic activity, inflation and income distribution in different institutional and economic settings (e.g. VoC, wage-led vs profit-led regimes, growth models). And third, the development of a macroeconomic model with endogenous union participation where the gender component is central to assess various "gendered dimensions of capitalism".

Untersuchungsmethoden

Given our discrete choice focus and the possible types of heterogeneity influencing agents’ choices we will employ models traditionally used in discrete choice literatures such as (multinomial) logistic regression and probit with and without random taste variation (Train, 2001) to identify what are the institutional and (macro)economic characteristics over time across countries which exhibit similar trends with respect to union density. Further, we will develop a novel macroeconomic model to investigate feedback effects between an endogenous unionisation (determined through a Brock and Durlauf (2001) discrete choice with social interactions approach) and key macroeconomic variables such as output and the wage share. Due to the resulting non-linear structure of the model, alongside formal local stability analysis, we will be using simulations and bifurcation analysis to check the robustness of our results.