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agreements through extension to non-union members and unaffiliated employers. In some countries, the difference between these two measures can be substantial. France is an example. Union density and bargaining coverage are relatively straightforward indicators since they can be expressed in numerical terms. However, particularly in developing countries, these data are often only partial and difficult to obtain.

The third dimension looks at the structure of collective bargaining. This is difficult to summarize in a single or small number of measures. Typically, two aspects are considered. One is the extent to which bargaining is centralized—for example, at the national, sectoral (intermediate), or establishment level. The other is concerned with the degree of coordination, i.e., the extent to which negotiations are guided by “peak” organizations (e.g., industry or national unions or employers’ associations); by tripartite social pacts; by pattern bargaining; or are determined in some way by government-imposed terms. Collective bargaining structures are usually measured by indices to capture the range from low to high centralization and coordination. Most often, these two aspects are measured separately though some researchers combine them in a single “corporatism” indicator. There is considerable debate about how well indices capture collective bargaining arrangements, since subjective judgements are required and since the arrangements can vary in different situations within a single country.

Empirical work on the effects of unions and collective bargaining usually takes one of two forms (Aidt and Tzannatos 2002). “Micro” analysis estimates various effects (on wages, employment, productivity, etc.) of union membership and collective bargaining on union workers or firms relative to non-union ones, or between workers/firms under different collective bargaining arrangements. This literature is usually based on data from household or establishment surveys in a single country. “Macro” analysis is concerned with many of the same variables but at level of national economies, using cross-country comparisons based on aggregate data.

The research on the impacts of unions and collective bargaining has been carried out against the backdrop of significant changes in these institutions in recent decades. In many developed countries, union membership has been declining and bargaining has become more decentralized (OECD 2006). The situation in developing countries is not as clear but the limited data available suggest similar trends.<sup>42</sup> Finally, any discussion of unions and collective bargaining in the context of developing countries must recognize the reality that these institutions in their traditional form are not well suited to much of the employment structure. This is especially the case in low-income countries where most people—such as farmers, the self-employed, and family workers—are not engaged in an employer-employee relationship. This is creating impetus for innovative institutions such as associations of self-employed workers. While these organizations may have some important impacts on the variables of interest in this review, they are not included.

> 42 Evidence on some developing countries can be found at the Institutional Characteristics of Trade Unions, Wage Setting, State Intervention and Social Pacts (ICTWSS) database, 1960–2010, Amsterdam Institute for Advanced Labour Studies.  The database is available at http://www.uva-aias.net/208.