Union ‘facilitation effect’ and access to non-wage benefits in the Ghanaian labour market

ABSTRACT

Effective access to mandatory non-wage benefits is key to workers achieving decent working conditions. This paper investigates the effects of union presence on workers’ access to non-wage benefits in the Ghanaian labor market. The study draws its data from the 2012–2013 Ghana Living Standards Survey (GLSS 6) and specifies a multivariate model that simultaneously controls for endogeneity and potential sample-selection biases. We find that unions have a significant effect on facilitation among workers by improving awareness of and access to work benefits. Other factors that affect benefit entitlements in Ghana include the gender of a worker, urbanization, firm size, sector formality, public v.s. private sector jobs, type of occupation, and the presence of work contracts amongst others. Results presented here indicate that workers from formal-sector firms with union presence are more likely to have access to non-wage benefits. It is also found that despite the statutory nature of these non-wage benefits, non-compliance was common, predominantly in the informal sector but also in the formal sector. This is particularly the case with respect to maternity leave benefits and indicates a need for greater enforcement of these laws.

KEYWORDS:

• Non-wage benefits
• sample-selection
• unions
• labour markets
• structural equation modelling

Acknowledgments

This research work was carried out with financial and scientific support from the Partnership for Economic Policy (PEP) with funding from the Department for International Development (DFID) of the United Kingdom (or UK Aid), and the Government of Canada through the International Development Research Center (IDRC). This paper is developed from the working paper by Owoo et al. (2017). The authors are also grateful to Prof. Luca Tiberti for technical support and guidance.

Disclosure statement

No potential conflict of interest was reported by the authors.

Supplementary material

Supplemental data for this article can be accessed here.

Notes

1. It is estimated that about 2/3rd of all formal sector jobs are subject to collective bargaining agreements.

2. Further discussion and references for this are provided by Caudill (1988) and Horrace and Oaxaca (2006).

3. Such models bound the estimated probability within the 0–1 interval whilst the linear-probability model does not. Nevertheless, neither model is supposed to be the true one.

4. Results available upon request.

Additional information

Funding

This work was supported by the Partnership for Economic Policy; Department for International Development (DFID); International Development Research Center (IDRC).

Notes on contributors

Nkechi S. Owoo

Nkechi S. Owoo: Her work ranges a number of topics including Food security, health and labour. She completed her PhD in Economics from Clark University, Massachusetts in the USA in 2012, and is now a senior lecturer at the University of Ghana. Nkechi works as a Research Associate at ARUA ACEIR.

Monica Puoma Lambon-Quayefio

Monica Puoma Lambon-Quayefio: In 2014, she completed her PhD at Clark University, Massachusetts in the USA. She is now a senior lecturer in the Department of Economics at the University of Ghana with broad research interest in demography and health economics. Monica is a Research Associate at ARUA Africa Center of Excellence for Inequality Research (ACEIR).

Jorge Dávalos

Jorge Dávalos: is an Associate Professor at Universidad del Pacifico in Lima, Peru. His research focuses on applied labour econometrics, impact evaluation and trade and labor market outcomes in developing countries (funded by a Swiss National Fund research grant). He was an econometrician at ILO's Regional Office for Latin America & the Caribbean. He collaborated in consultancy projects with the World Bank and other financial institutions. In collaboration with United Nations-ILO, he developed employment projection models with the purpose of forecasting skills mismatches at the sectorial level based on econometric and Input-Output methodologies for Peru, Costa Rica, Algeria and Ecuador. Jorge holds a Ph.D. in econometrics from the University of Geneva.

Samuel B. Manu

Samuel B. Manu: is a Ph.D candidate at the School of Economics at the University of Cape Town (UCT) in South Africa, and a Research Officer at the Institute of Economic Affairs (IEA) Ghana. His doctoral research focuses on investigating the macroeconomic and welfare implications of foreign exchange intervention in inflation targeting developing economies. Samuel has considerable experience in macroeconomic modelling and survey data analysis. He holds an MPhil in Economics from the Kwame Nkrumah University of Science and Technology.