"Corporatism and Unemployment in the 1980s and 1990s"Lane Kenworthy
American Sociological Review, vol. 67, no. 3, 2002, pp. 367-388
Abstract
A number of studies have found an association between corporatist institutions and low unemployment in the 1970s and/or 1980s. This paper attempts to fill three gaps in our understanding of corporatism's labor market effects: (1) Which of the two principal forms of corporatism — corporatist wage setting or union participation in economic policy making, or both — generates these effects? (2) What are the causal mechanisms? (3) Did these effects continue in the 1990s in the face of globalization, restrictive monetary policy, growing dissension within labor movements, and related developments? I use pooled time-series cross-section analysis to assess the impact of corporatism across 16 affluent OECD countries in the 1980s and 1990s. The results suggest that wage coordination was conducive to low unemployment in the 1980s because it fostered labor cost moderation, spurred faster economic growth, and encouraged governments to more aggressively pursue unemployment-reducing policies. In the 1990s this effect disappeared, largely because unemployment outcomes in low wage-coordination countries improved rather than because those in high wage-coordination countries deteriorated. Union participation in economic policy making was associated with low unemployment throughout the two decades, conditional on the presence of leftist government. Union participation appears to have had this effect mainly via government policy.
Data set
Click here to access the data set, which is in Microsoft Excel. The data cover 16 countries over 18 years (1980-1997). For variable definitions and data sources, see Table 1 of the article. The variables are:
Country
1 Austria
2 Belgium
3 Canada
4 Denmark
5 Finland
6 France
7 Germany
8 Ireland
9 Italy
10 Japan
11 Netherlands
12 Norway
13 Sweden
14 Switzerland
15 United Kingdom
16 United States
Year
Unemployment
Lagged unemployment (t-1)
Wage coordination
Wage coordination x 1992-1997 dummy
Wage coordination x 1993-1997 dummy
Union participation in economic policy making
Leftist government
Union participation x leftist government
Union participation x leftist government x 1992-1997 dummy
1992-1997 dummy
1993-1997 dummy
Trade
Union density
Employment regulations
Tax rate on workers
Unemployment benefit duration
Real labor costs
Lagged real labor costs (t-1)
Real GDP
Real long-term interest rates
Total government expenditures
Education expenditures
Active labor market policy expenditures
Government employment
Inflation
1981 dummy
1982 dummy
1983 dummy
1984 dummy
1985 dummy
1986 dummy
1987 dummy
1988 dummy
1989 dummy
1990 dummy
1991 dummy
1992 dummy
1993 dummy
1994 dummy
1995 dummy
1996 dummy
1997 dummy