Annual Conference of the Midwest Political Science Association (MPSA) edition:72 location:Chicago (Ill.) date:3-6 April 2014
In this paper we investigate the relationship between trade union density and social expenditure for OECD member countries from 1980 to 2010. Two causal mechanisms have been invoked to explain the positive correlation that has been identified between union membership and social expenditure. On the one hand, unions try to influence policy decisions, but on the other hand it is easier for trade unions to mobilize members in an economic system that spends more resources on redistribution. The time series analysis indicates that trade union density is a significant determinant of social expenditure, and that this effect is most prominent in coordinated market economies. The findings also show a strong policy feedback mechanism whereby social expenditure has an effect on subsequent levels of union density, regardless of the contextual political system. We close with some speculation about the implications of these findings in the current economic downturn.