When union’s activity matters: The impact of union centralization on economic growth in OECD countries

It is nowadays accepted that labor market institutions matter in the economic development. However, empirical studies on unions’ effect are not univocal. Besides traditional indicators of unions’ presence, this paper uses a new indicator to estimate a growth equation using a recent panel dataset on OECD countries. We provide new insight on the impact of unions on the longrun performance of OECD economies. It is shown that a bargaining coverage lower than average and a high degree of union centralization can be harmful to growth. Our study makes the case for new indicators that capture more accurately the bargaining systems.