Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/272662 
Year of Publication: 
2023
Series/Report no.: 
IZA Discussion Papers No. 16035
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Do trade unions benefit from economic crises by attracting new members among workers concerned about job security? To address this question, we provide a comprehensive empirical investigation based on panel data from Germany, where workers individually decide on their membership. We analyse whether exogenously manipulated perceptions of job insecurity encourage individuals to join a union. Firm-level workforce reductions serve as the first trigger of perceived job insecurity. Regional unemployment rates represent a second source of exogenous variation. Third, we propose a novel identification approach based on plant-closure-induced job losses of other workers in the same region. In each case, we exploit the longitudinal nature of the data to analyse the implications of changes in labour market conditions for changes in union membership using an instrumental-variable approach. We consistently find that perceived job insecurity, as triggered by labour market turmoil, increases the likelihood of individual union membership. Analysing data on media coverage about downsizing in a complementary investigation, we add further evidence to the notion of trade unions as beneficiaries of labour market crises. Finally, we consider workers who lose their jobs and find no evidence of adverse effects on union membership among those directly affected by the labour market situation.
Subjects: 
job security
German Socio-Economic Panel
workforce reduction
trade union membership
regional labour markets
media coverage
JEL: 
D84
J51
J63
Document Type: 
Working Paper

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