TRADE UNIONS AND THE INFORMAL ECONOMY: A MEDIATION ANALYSIS
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2020-08-13
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en
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The aim of the paper is to analyze whether the informal sector acts as a mediator between the labor unions, in particularly the bargaining system, and the formal economic activity. The motivation behind the research lies in the fact that the informal sector is estimated to employ around 2.5 billion people in the world, and trade unions are being encourage to capture these workers in order to help them achieve rights (International Labour Office, 2019). Moreover, there is a close link between the negative externalities arising from the trade unions activity and the determinants of the informal economy. The cross-country path analysis is carries out using Structural Equation Models. Two models are included, a static path analysis and a dynamic cross-lagged panel model. the sample includes 39 countries for the period 2001-2017. The main results are that the informal economy acts as a mediator for the formal one and the bargaining indicators have a stronger relationship with the informal sector than the formal one. The dynamic model is in line with the static one and the lagged effect of the variables of interest is small as the institutions are relatively stable over time.
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Faculteit der Managementwetenschappen