<abstract xmlns="http://www.w3.org/1999/xhtml"><p>In many countries, collective bargaining coverage is enhanced by government-issued extensions that widen the reach of collective agreements beyond their signatory parties to all firms and workers in the sector. This paper analyzes the causal impact of extensions using a natural experiment in Portugal that resulted in a sharp and unanticipated decline in the extension probability of agreements. Our results, based on a regression discontinuity design, indicate that extensions had a negative impact on employment growth. This effect is concentrated among nonaffiliated firms, which may reflect the limited representativeness of employer associations.</p></abstract>

In many countries, collective bargaining coverage is enhanced by government-issued extensions that widen the reach of collective agreements beyond their signatory parties to all firms and workers in the sector. This paper analyzes the causal impact of extensions using a natural experiment in Portugal that resulted in a sharp and unanticipated decline in the extension probability of agreements. Our results, based on a regression discontinuity design, indicate that extensions had a negative impact on employment growth. This effect is concentrated among nonaffiliated firms, which may reflect the limited representativeness of employer associations.

No extension without representation? Evidence from a natural experiment in collective bargaining

IZA Journal of Labor Economics

This work is licensed under the Creative Commons Attribution 4.0 International License.

In many countries, collective bargaining coverage is enhanced by government-issued extensions that widen the reach of collective agreements beyond their...

No extension without representation? Evidence from a natural experiment in collective bargaining

Published Online: Aug 20, 2020

Page range: -

DOI: https://doi.org/10.2478/izajole-2020-0005

Keywords
industrial relations, employer associations, wage setting, employment

© 2020 Alexander Hijzen, Pedro S. Martins, published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

No extension without representation? Evidence from a natural experiment in collective bargaining

Published Online: Aug 20, 2020

Page range: -

DOI: https://doi.org/10.2478/izajole-2020-0005

Keywordsindustrial relations, employer associations, wage setting, employment

© 2020 Alexander Hijzen, Pedro S. Martins, published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Keywords
industrial relations, employer associations, wage setting, employment