Union Membership and the Erosion of the Ghent System: Lessons from Finland

Labour Institute for Economic Research Discussion Paper No. 213

32 Pages Posted: 12 Oct 2005

See all articles by Roope Uusitalo

Roope Uusitalo

Uppsala University - Department of Economics; IFAU - Institute for Labour Market Policy Evaluation; Government of the Republic of Finland - VATT Institute for Economic Research; IZA Institute of Labor Economics

Petri Bockerman

Labour Institute for Economic Research; University of Turku - Turku School of Economics

Date Written: September 2005

Abstract

Union density declined in Finland by more than 10 percentage points in less than ten years. This paper analyses the reasons behind the decline, using micro data from the 1990s. According to our results, the changes in the composition of the labour force and the changes in the labour market explain about a quarter of this decline. The main reason for the decline appears to be the erosion of the Ghent system, due to the emergence of an independent UI fund that provides unemployment insurance without requiring union membership. Interestingly, we find evidence that the decline in the union density can be attributed to declining inclination of the cohorts born after the early 1960s to become union members.

Keywords: Trade unions, Ghent system, union density

JEL Classification: J51

Suggested Citation

Uusitalo, Roope and Bockerman, Petri, Union Membership and the Erosion of the Ghent System: Lessons from Finland (September 2005). Labour Institute for Economic Research Discussion Paper No. 213, Available at SSRN: https://ssrn.com/abstract=815485 or http://dx.doi.org/10.2139/ssrn.815485

Roope Uusitalo

Uppsala University - Department of Economics ( email )

Box 513
SE-75120 Uppsala
Sweden

IFAU - Institute for Labour Market Policy Evaluation

Box 513
751 20 Uppsala
Sweden

Government of the Republic of Finland - VATT Institute for Economic Research

Arkadiankatu 7
P.O Box 1279
Helsinki, FIN-00531
Finland

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Petri Bockerman (Contact Author)

Labour Institute for Economic Research ( email )

FIN-00530 Helsinki
Finland
+358 9 2535 7332 (Phone)
+358 9 2535 7332 (Fax)

HOME PAGE: http://www.petribockerman.fi/

University of Turku - Turku School of Economics ( email )

Rehtorinpellonkatu 3
TURKU, FI-20500
Finland

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