"Analysing annual data on union membership, the authors examine the short- and long-term determinants of union growth and decline in post-war Western Europe. Using fixed effect estimates of an error correction model on a panel of 14 countries, structural, cyclical and institutional determinants are incorporated in a ‘social customs' framework of union membership. The results show that union decline during the 1980s and 1990s is largely endogenous to labour market changes, the impact of which is mediated by a specific set of labour market institutions. Union density rates declined because unemployment increased, newcomers in the labour force were recruited or sorted into jobs and workplaces less covered by unions, inflation decreased, indexation clauses were dismantled and replacement rates lowered, public employment shrank and strike activity declined."

Support: Digital