A new GLO Discussion Paper provides evidence that Employer Associations affiliated firms in Portugal exhibit better outcomes concerning sales, employment, productivity, and wages.
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GLO Discussion Paper No. 496, 2020
GLO Fellow Pedro S. Martins
Author Abstract: While trade unions have been studied in detail, there is virtually no economics research on employer associations (EAs), trade unions’ counterparts in many countries. However, besides conducting collective bargaining, EAs perform several other activities that can influence economic outcomes, including training and coordination. This paper studies the contributions of EAs by comparing affiliated and non-affiliated firms in terms of sales, employment, productivity, and wages. Using matched employer-employee panel data for Portugal, we find that affiliated firms exhibit better outcomes along most of these dimensions, even when drawing on changes in affiliation status over time; and that this affiliation premium tends to increase with EA coverage (defined as the percentage of workers in the relevant industry/region domain that are employed by affiliated firms). Sectors as a whole also appear to benefit from EA coverage, even if non-affiliated firms do worse.
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