Determinants of Collective Bargaining Centralization

Abstract

Various factors influence the development of collective bargaining structures. Based on cross-sectional and pooled cross-sectional data from the British Workplace Employment Relations Survey series, this article discusses and empirically analyses the establishment-level determinants of collective bargaining centralization, i.e. whether an establishment is covered by single-employer collective bargaining or multi-employer collective bargaining. It argues that the employers' and trade unions' preferences for a particular bargaining structure depend on the outcome of cost—benefit analyses of different available institutional alternatives. The actual choice of a collective bargaining structure then reflects the interaction of the actors' preferences, moderated by an institutionally determined decision-making process. Estimation of a probit model with pooled cross-sectional data shows that the number of unions present at the establishment, membership of an employers' association, and public sector affiliation are positively associated with collective bargaining centralization. In contrast to this, establishment size, trade union density, foreign ownership and control, and international product markets are negatively associated with centralization. Neither establishment age nor foreign ownership appeared to be significant.