How Collective Bargaining Shapes Poverty: New Evidence for Developed Countries
Kevin Pineda-Hernández (),
Francois Rycx and
Mélanie Volral
No 14555, IZA Discussion Papers from Institute of Labor Economics (IZA)
Abstract:
Although many studies point to the significant influence of collective bargaining institutions on earnings inequalities, evidence on how these institutions shape poverty rates across developed economies remains surprisingly scarce. It would be a mistake, though, to believe that the relationship between earnings inequalities and poverty is straightforward. Indeed, whereas earnings inequalities are measured at the individual level, poverty is calculated at the household level using equivalised (disposable) incomes. Accordingly, in most developed countries poverty is not primarily an issue of the working poor. This paper explicitly addresses the relationship between collective bargaining systems and working-age poverty rates in 24 developed countries over the period 1990-2015. Using an up-to-date and fine-grained taxonomy of bargaining systems and relying on state-of-the-art panel data estimation techniques, we find that countries with more centralised and/or coordinated bargaining systems display significantly lower working-age poverty rates than countries with largely or fully decentralised systems. However, this result only holds in a post-tax benefit scenario. Controlling for country-fixed effects and endogeneity, our estimates indeed suggest that the poverty-reducing effect of collective bargaining institutions stems from the political strength of trade unions in promoting public social spending rather than from any direct effect on earnings inequalities.
Keywords: panel data; advanced economies; collective bargaining systems; poverty rates; social security expenditures (search for similar items in EconPapers)
JEL-codes: C23 C26 I32 I38 J51 J52 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2021-07
New Economics Papers: this item is included in nep-cwa and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)
Published - published in: British Journal of Industrial Relations, 2022, 60 (4), 895-928
Downloads: (external link)
https://docs.iza.org/dp14555.pdf (application/pdf)
Related works:
Journal Article: How collective bargaining shapes poverty: New evidence for developed countries (2022) 
Working Paper: How collective bargaining shapes poverty: New evidence for developed countries (2022) 
Working Paper: How Collective Bargaining Shapes Poverty: New Evidence for Developed Countries (2021) 
Working Paper: How Collective Bargaining Shapes Poverty:New Evidence for Developed Countries (2021) 
Working Paper: How Collective Bargaining Shapes Poverty: New Evidence for Developed Countries (2021) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp14555
Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Access Statistics for this paper
More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().