Does Unionization Rate Matter for Labor Productivity Level: Panel Evidence

Abstract

This study investigates the effect of unionization rate on labor productivity by using thirteen distinct labor productivity indicators. The data used in the analyses is unbalanced data covers the periods between 2000 and 2013 for fifty one countries. There are two opposite empirical findings on the issue in the literature. While some of the studies find negative association between unionization and productivity, the others find positive association between unionization and productivity. Hence the impact of unionization on productivity is ambiguous. The main finding of the study reveals a strong and statistically significant negative association between unionization rate and labor productivity and this finding remains valid in all models. Hence we may conclude that countries with higher unionization rate face lower labor productivity level.