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No extension without representation? Evidence from a natural experiment in collective bargaining

Alexander Hijzen
Alexander Hijzen
 and 
Pedro S. Martins
Pedro S. Martins
   | Aug 20, 2020
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Published Online: Aug 20, 2020
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DOI: https://doi.org/10.2478/izajole-2020-0005
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© 2020 Alexander Hijzen, Pedro S. Martins, published by Sciendo
This work is licensed under the Creative Commons Attribution 4.0 International License.

Figure 1

Collective bargaining coverage and trade union density.Source: ILO (2013).
Collective bargaining coverage and trade union density.Source: ILO (2013).

Figure 2

The representativeness of collective agreements.Source: Ministry of Labour (DGERT) and Quadros de Pessoal, authors’ calculations. Note: The vertical axis indicates the number of agreements of each level of representativeness.
The representativeness of collective agreements.Source: Ministry of Labour (DGERT) and Quadros de Pessoal, authors’ calculations. Note: The vertical axis indicates the number of agreements of each level of representativeness.

Figure 3

Number of sectoral collective agreements and extensions, 2000–2015.Source: Ministry of Labour (DGERT), authors’ calculations. Note: The vertical axis indicates the number of agreements in each year considered.
Number of sectoral collective agreements and extensions, 2000–2015.Source: Ministry of Labour (DGERT), authors’ calculations. Note: The vertical axis indicates the number of agreements in each year considered.

Figure 4

The probability that a collective agreement is extended.Source: Ministry of Labour (DGERT), authors’ calculations. Weeks from March 1, 2011 (September 2010–June 2011).
The probability that a collective agreement is extended.Source: Ministry of Labour (DGERT), authors’ calculations. Weeks from March 1, 2011 (September 2010–June 2011).

Figure 5

The number of collective agreements over time.Source: Ministry of Labour (DGERT), authors’ calculations.
The number of collective agreements over time.Source: Ministry of Labour (DGERT), authors’ calculations.

Figure 6

The overall effects of extensions on employment growth.Notes: The figure presents the estimated change in the growth rate of employment by collective agreement publication week, as measured from the threshold date of March 1, 2011 (week 0). The results are estimated from a sharp RDD using employment weights. The size of the circles is proportional to the employment of the corresponding collective agreement(s). Standard errors are robust and clustered by collective agreement and signature date. *, **, *** refer to statistical significance levels of 10%, 5%, and 1%, respectively. Authors’ calculations based on QP and DGERT data.
The overall effects of extensions on employment growth.Notes: The figure presents the estimated change in the growth rate of employment by collective agreement publication week, as measured from the threshold date of March 1, 2011 (week 0). The results are estimated from a sharp RDD using employment weights. The size of the circles is proportional to the employment of the corresponding collective agreement(s). Standard errors are robust and clustered by collective agreement and signature date. *, **, *** refer to statistical significance levels of 10%, 5%, and 1%, respectively. Authors’ calculations based on QP and DGERT data.

Figure 7

The effects of extensions by affiliation status.Notes: “Membership status: 0” refers to nonaffiliated firms; “Membership status: 1” refers to affiliated firms. The figure presents the estimated change in the growth rate of employment by collective agreement publication week, as measured from the threshold date of March 1, 2011 (week 0). The results are estimated from a sharp RDD using employment weights. The size of the circles is proportional to the employment of the corresponding collective agreement(s). Standard errors are robust and clustered by collective agreement and signature date. *, **, *** refer to statistical significance levels of 10%, 5%, and 1%, respectively.
The effects of extensions by affiliation status.Notes: “Membership status: 0” refers to nonaffiliated firms; “Membership status: 1” refers to affiliated firms. The figure presents the estimated change in the growth rate of employment by collective agreement publication week, as measured from the threshold date of March 1, 2011 (week 0). The results are estimated from a sharp RDD using employment weights. The size of the circles is proportional to the employment of the corresponding collective agreement(s). Standard errors are robust and clustered by collective agreement and signature date. *, **, *** refer to statistical significance levels of 10%, 5%, and 1%, respectively.

Results on inequality

Panel A. Fuzzy RDD
(1)(2)(3)(4)(5)(6)(7)(8)
Δp5Δ(p50-p5)Δp10Δ(p50-p10)Δp15Δ(p50-p15)Δp20Δ(p50-p20)
Treatment effect0.0805-0.08650.0695-0.07550.0710-0.07700.0289-0.0349
(0.0373)(0.0481)(0.0400)(0.0532)(0.0566)(0.0721)(0.0285)(0.0453)
*****
Constant-0.02860.0501-0.00820.0296-0.02480.0463-0.01090.0324
(0.0221)(0.0296)(0.0205)(0.0297)(0.0327)(0.0419)(0.0165)(0.0259)
Relative time effectsLinearLinearLinearLinearLinearLinearLinearLinear
Observations6262626262626262
R-squared0.08750.12170.22900.23530.17270.18580.06440.1265

Sensitivity analysis, all firms

Panel A. Fuzzy RDD1
Employment growthChange in employment growth
BaselineControlsBandwidthFalsificationBaselineControlsBandwidthFalsification
Treatment dummy-0.0953-0.0511-0.0976-0.1574-0.1217-0.1540
(0.0446)(0.0163)(0.0566)(0.0548)(0.0189)(0.0523)
***************
Constant-0.1042-0.0963-0.1078-0.1950-0.1350-0.1701
(0.0388)(0.0053)(0.0523)non-available(0.0380)(0.0123)(0.0327)non-available
****************
Relative time effectsLinearLinearLinearLinearLinearLinear
Observations626276626276
R-squared0.39760.34720.49750.65790.54520.6898

Balancing tests

AllNon-affiliatedAffiliated
(1)(2)(3)(4)(3)(4)
Balancing variableslinearquadraticlinearquadraticlinearquadratic
Representativeness, 20100.0815−0.00800.0923−0.01830.02200.0303
- share of workforce in afffiliated firms(0.1143)(0.0574)(0.1422)(0.0617)(0.0695)(0.0510)
Employment growth, 2009-20100.08650.09750.09530.10450.08130.0844
(0.0155)(0.0080)(0.0195)(0.0106)(0.0099)(0.0076)
******************
Log employment, 2010−0.2195−0.1584−0.4327−0.36260.50930.1547
(0.6026)(0.6073)(0.6009)(0.6273)(0.7890)(0.5082)
Log average firm size, 2010−1.2418−1.4115−1.2439−1.3098−1.5805−1.6135
- number of workers per firm(0.3004)(0.1840)(0.2429)(0.2017)(0.2265)(0.1765)
******************
Log average wage, 2010−0.0510−0.0812−0.0530−0.0603−0.1147−0.1120
- within job title and year(0.0870)(0.0956)(0.0852)(0.0875)(0.0901)(0.0758)
Log median wage, 20100.0040−0.0092−0.0127−0.0059−0.0243−0.0035
- within job title and year(0.0764)(0.0828)(0.0775)(0.0781)(0.0824)(0.0605)
Export intensity, 2010−0.4642−0.4553−0.4072−0.3808−0.5818−0.6151
(0.0523)(0.0494)(0.0579)(0.0583)(0.0466)(0.0264)
******************
Log labour productivity, 20100.1753−0.07350.23130.0320−0.2217−0.1636
(0.4604)(0.5252)(0.4727)(0.5360)(0.3814)(0.2627)

Collective agreements and extensions

Agreement sectorDate agreementDate extension
Metallurgic industry9/8/201012/22/2010
Agriculture, fishing and forestry9/22/20101/10/2011
Car sale10/8/20101/10/2011
Viana do Castelo retail10/8/201012/29/2010
Clinical analysis labs11/8/20102/28/2011
Wine trade sector11/22/20102/28/2011
Football clubs (players)12/15/20103/22/2011
Cork industry, North, Office workers12/29/20104/26/2011
Wine industry, cellars1/10/20114/26/2011
Textile industry1/24/2011
Hotels and restaurants, Centre and South1/24/20115/23/2011
Aveiro retail2/22/20115/23/2011
Ropes industry2/28/2011
Chemical and pharmaceutical retail2/28/20115/30/2011
Wood3/9/2011
Pharmaceutical products retail3/29/2011
Merchandising firms3/29/2011
Viseu retail4/8/2011
Wheat4/8/2011
Coffee4/8/2011
Driving schools4/8/2011
Fish preserve industry4/26/2011
Bread manufacturing, Lisbon4/26/2011
Guarda, retail4/29/2011
Poultry, slaughter5/9/2011
Farming5/9/2011
Meat, retail, South5/16/2011
Retail storehouses5/23/2011
Bread manufacturing5/23/2011
Fishing5/30/2011
Non-alcoholic beverages5/30/2011
Cement6/8/2011
Shoe manufacturing7/15/2011
Farming, Abrantes7/15/2011
Farming, Beja7/22/2011
Construction sector8/8/2011
Private schools8/16/2011
Clothing8/16/2011
Textile industry8/16/2011

Table 5

Panel A. Results on the role of representativeness by affiliation status
FuzzySharp
(1)(2)(1)(2)
ΔEΔΔEΔEΔΔE
Treatment effect *−0.1278−0.1757−0.0822−0.0974
non-affiliated firms(0.0424)(0.0621)(0.0354)(0.0386)
**********
Treatment effect *0.34150.3383−0.0780−0.0531
affiliated firms(0.1412)(0.1542)(0.0427)(0.0454)
*****
Representativeness *−0.2729−0.1284−0.3197−0.0297
non-affiliated firms(0.1469)(0.1888)(0.1690)(0.1893)
Representativeness ** 0.17700.0388* 0.0805−0.0691
affiliated firms(0.0797)(0.1047)(0.0594)(0.0769)
**
Treatment dummy *0.30240.12960.2443−0.1178
non-affiliated firms *(0.1603)(0.2129)(0.1706)(0.2044)
representativeness*
Treatment dummy *−0.5177−0.2431−0.1288−0.0233
affiliated firms *(0.2553)(0.2887)(0.1087)(0.0989)
representativeness*
Affiliated firms−0.2098−0.20050.0079−0.0016
(0.0866)(0.0741)(0.0428)(0.0406)
****
Constant−0.0025−0.0467−0.0265−0.0740
(0.0390)(0.0341)(0.0332)(0.0304)
**
Relative time effectslinearlinearlinearlinear
Observations62625858
R-squared0.50420.67470.55870.7248

Results by affiliation status

Panel A. Employment growth (ΔE2011)1
Fuzzy RDDSharp RDD
BaselineControlsBandwidthFalsificationBaselineControlsBandwidthFalsification
Non-affiliated firms-0.1121-0.1395-0.1114-0.0536-0.0515-0.00710.0684
(0.0470)(0.0574)(0.0592)(0.0329)(0.0248)(0.0311)(0.1080)
*******
Affiliated firms0.1790.11720.0087-0.0980-0.0982-0.061-0.0280
(0.0712)(0.0876)(0.0962)(0.0204)(0.0326)-0.0292(0.0336)
**********
Constant-0.0544-0.0587-0.0527non-available-0.0786-0.0975-0.0722-0.0978
(0.0180)(0.0275)(0.0300)(0.0156)(0.0187)-0.0269(0.1082)
*************
Relative time effectslinearlinearlinearlinearlinearlinearlinear
Observations62627658587246
R-squared0.41570.38020.50260.45790.4140.54320.5393

The effects of extensions, all firms

Panel A. Employment growth (ΔE2011)
FuzzySharp
(1)(2)(1)(2)
Treatment dummy−0.0953−0.0500−0.0578−0.0420
(0.0446)(0.0591)(0.0262)(0.0262)
****
Constant−0.1042−0.1358−0.1226−0.1293
(0.0388)(0.0274)(0.0313)(0.0236)
***********
Relative time effectsLinearQuadraticLinearQuadratic
Observations62626262
R-squared0.39760.40370.42900.4359
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