NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

NBER Working Papers by Gaston J. Labadie

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Working Papers

January 2000The Effect of Unions on Employment: Evidence from an Unnatural Experiment in Uruguay
with Adriana Cassoni, Steven G. Allen: w7501
This study examines the impact of unions on wages and employment using data from Uruguay in a period where unions were banned (1973-1984), then legalized with tripartite bargaining (1984-1991) followed by industry-wide or firm-specific bargaining (1992-1997). The relationship between wages and employment shifted significantly across these periods as evidenced by - Recursive residuals show structural shifts in five of six industries with the shifts coming at the same time as the regime changes. - Wages are exogenous to employment before 1985, but not afterwards. - The wage elasticity and the employment-output elasticity fell sharply after 1984. - Unions significantly raised wages in 1985-1992, but afterwards the change in bargaining structure and increased openness led to concessio...

Published: Job Creation in Latin America and the Caribbean: Recent Trends and the Policy Challenges. Carmen Pages, Gaelle Pierre, Stefano Scarpetta (eds) 2009

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