Trade union density and social expenditure: a longitudinal analysis of policy feedback effects in OECD countries, 1980–2010

ABSTRACT

Two causal mechanisms have been invoked to explain the positive correlation between union membership and social expenditure. Unions try to influence policy, but they are also more successful in mobilizing members in economic systems in which actors engage in co-ordinated strategic interaction. Applying insights from the policy feedback and comparative capitalism literatures, our analysis indicates that union density is a determinant of social expenditure. A strong policy feedback effect is also present whereby social expenditure has a positive effect on union density. We find a positive effect of union density on social expenditure in co-ordinated market economies, but not in liberal market economies. We discuss the implications of these findings for citizens’ capacity to influence policy in varied contexts and for the ‘varieties of capitalism’ literature, and we close with some speculation about the implications of these findings in the current economic downturn.

KEY WORDS:

• Collective policy actors
• policy effects
• policy feedback
• social expenditure
• trade unions
• varieties of capitalism

ACKNOWLEDGMENTS

The authors thank Jeremy Albright, Michael Delli Carpini, Noam Gidron, Jan Leighley, Ronen Mandelkern, Chris Reece and Theda Skocpol for comments on the research.

FUNDING

The authors wish to thank the European Research Council for the ERC Advanced Grant 295920 on democratic linkage between citizens and the state.

SUPPLEMENTAL DATA AND RESEARCH MATERIALS

Supplemental data for this article can be accessed on the Taylor & Francis website, doi: 10.1080/13501763.2015.1102952.

Notes

1 Of OECD countries, four are not included owing to lack of data (Czech Republic, Estonia, Greece and Switzerland). For the parallel estimation of large OECD nations only we include 22 nations (Australia, Austria, Belgium, Great Britain, Canada, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the United States). Countries like Luxembourg and Iceland are not included owing to their small size, and countries like Mexico are not included because of their low GDP/capita (Hall and Soskice 2001: 19–21).

2 The variance inflation factor (VIF) for trade union is 17.85; the average VIF for all items in the model is lower than 10.

Additional information

Notes on contributors

Marc Hooghe

Biographical notes

Marc Hooghe is a professor of political science at the University of Leuven in Belgium.

Jennifer Oser

Jennifer Oser is an assistant professor of politics and government at the Ben-Gurion University of the Negev in Israel.