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countries with highly coordinated bargaining<sup>46</sup> tend to have lower unemployment rates than other countries. With respect to unemployment, they do not find support for the “hump-shaped” hypothesis—i.e., that both coordinated and uncoordinated bargaining lead to better performance than semi-coordinated bargaining (Calmfors and Driffill 1988). About two-thirds of the studies they reviewed found no significant association between the degree of bargaining coordination and employment rates.

A number of more recent studies find that coordinated and/or centralized bargaining structures are associated with lower unemployment. The OECD (2006), in its 17-study review, concluded that a high degree of corporatism (i.e., coordination and centralization) was associated with lower unemployment in many, though not all, studies. Some studies finding this relationship include Bassanini and Duvall (2006); Nickell, Nunziata, and Ochel (2005); IMF (2003); and Glyn _et al._ (2003). Other studies, such as Baccaro and Rei (2005), that find that union density/coverage increases unemployment conclude that this negative effect is reduced when bargaining is coordinated.

There is also no consistent story on whether different bargaining structures help or hurt employment when economies are hit by adverse shocks. Bassanini and Duvall (2006) conclude that high levels of coordination reduce the negative employment impacts of shocks while Bertola, Blau, and Kahn (2002) and Bertola _et al._ (2002) find the opposite effect. Blanchard and Wolfers (2000) determine that higher union density and coverage increase adverse effects of shocks but these are reversed to some extent by coordinated bargaining. In the end, the lack of consensus on the employment effects of bargaining arrangements is due at least in part to difficulties measuring structures and practices, especially given the variations that exist in different country contexts.

# **_5.2  Impacts on productivity_**

Most of the research in this area has been carried out in the U.S. and the U.K., with only a few studies from other developed countries or from developing countries. It is also interesting to note that most of the empirical research on productivity effects of unions and bargaining structure was carried out before 2000.

As has already been discussed, the “voice” theory suggests that unions can exert a positive impact on productivity. To what extent is this supported by empirical research? Aidt and Tzannatos (2002) conclude that results are not robust regarding productivity levels or growth, with a fair bit of disagreement between studies. Freeman’s (2010) review of developing country studies is also inconclusive. A positive union productivity effect has been found in Mexico (Fairris 2006) and Malaysia (Standing 1992); a negative effect has been found in Brazil except where there is profit sharing (Menezes _et al._ 2005); and the effect in Guatemala depended on the model specification (Urizar and Lee 2005). On balance, the context appears to matters a lot, with unions more likely to have a positive effect on productivity where product markets are competitive and the “quality” of industrial relations is good.<sup>47</sup> With respect to the latter factor,

> 46 They define “bargaining coordination” to include centralization, concentration, informal coordination, and corporatism (Aidt and Tzannatos 2002: 101).

> 47 This conclusion is based on Bellman’s (1992) review of productivity effects in the U.S. Bellman uses grievances, strikes, quits, and the presence of long-term collective agreements as indicators of the quality of industrial relations.