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

21 Pages Posted: 25 May 2006

See all articles by Petri Bockerman

Petri Bockerman

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

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

Abstract

Union density declined in Finland by more than 10 percentage points in less than 10 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 only 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 unemployment insurance fund that provides unemployment insurance without requiring union membership. We also find that the decline in the union density can be attributed to the declining inclination of the cohorts born after the early 1960s to become union members.

Suggested Citation

Bockerman, Petri and Uusitalo, Roope, Erosion of the Ghent System and Union Membership Decline: Lessons from Finland. British Journal of Industrial Relations, Vol. 44, No. 2, pp. 283-303, June 2006, Available at SSRN: https://ssrn.com/abstract=903559 or http://dx.doi.org/10.1111/j.1467-8543.2006.00498.x

Petri Bockerman (Contact Author)

Labour Institute for Economic Research ( email )

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University of Turku - Turku School of Economics ( email )

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Roope Uusitalo

Uppsala University - Department of Economics ( email )

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IFAU - Institute for Labour Market Policy Evaluation

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