Replication Data for: The Conditional Effect of Technological Change on Collective Bargaining Coverage

Recent work in labor economics has shown that technological change has induced labor market polarization, an increase in demand for both high and low skill jobs, but declining demand for middle skill routine task jobs. We argue that labor market polarization should affect firms’ participation in collective agreements, but only in countries where laws automatically extending collective agreements to non-participating firms are weak. We develop an argument in which labor market polarization increases the distance between different skill groups of workers in both preferences for unionization and leverage to realize those preferences. Because of this, an increase in labor market polarization should be associated with a decline in collective bargaining coverage. We test this theory in two samples: (1) a sample of 20 OECD countries from 1970-2010; (2) a sample of firm-level and industry-level data 1993-2007 from Germany, a country with weak collective agreement extension procedures. We find a negative relationship in the OECD sample between technological change and collective bargaining coverage only in countries which make little or no use of extension procedures. We find that higher workforce skill polarization is associated with lower collective agreement participation in both German firm-level and industry-level samples.