Are workers and firms well represented in social dialogue? In many countries, affiliation rates to social partners (employer associations and trade unions) have been decreasing for decades. However, social dialogue still regulates labour conditions of a significant part of firms and workers through collective agreements and, in some cases, their extensions. The result of this social dialogue generally includes conditions over wages, working time, training, and many other issues, with important effects on the labour market and the economy.
Schooling typically delivers significant private returns, with better educated individuals generally receiving higher earnings. However, the schooling of one person has also the potential to generate significant positive effects on other individuals, through formal and informal social interactions between them. Economists refer to these spillovers as ‘externalities’. These third-party effects also explain the wedge between private and social returns to education: while the former are typically estimated at 5% to 10%, the latter can be as high as 10% to 20%.
China’s recent emergence in the world economy was underpinned by a massive process of labour reallocation delivered by the country’s nascent labour market. After several decades in which labour was allocated and rewarded centrally, according to communist principles, a number of market-oriented reforms led to greater flexibility and responsiveness to demand and supply. Given the large pool of underemployed workers eager to increase their incomes, in particular in rural areas – over 150 million people according to some estimates –, the potential for growth from industrialisation and exports was considerable.
This note summarises the research presented in a policy workshop held last week in Brussels. The studies were conducted under the ‘Economic Analysis of Collective Bargaining Extensions’ (CoBExt) project, funded by the European Union, and focused on the cases of Greece, Italy, Portugal and Spain.
In my introduction, I presented a comparison of collective bargaining (CB) across the four countries. Despite generally low trade union density rates, particularly in the private sector, these countries exhibit very high CB coverage, precisely because of widespread and nearly automatic (explicit or implicit) extensions. The exceptions to these practices were Greece and Portugal but only during their adjustment programmes, when extensions were entirely suspended (Greece) or made conditional on representativeness criteria similar to other EU Member States (Portugal). In Greece, firm-level CB agreements were also boosted through the suspension of the favourability principle, which allowed for greater differentiation in working conditions across firms.