Do Fewer Unions Make Countries More Competitive? No it seems

The effect of unionization on a country’s economic competitiveness is of great interest to — and controversy among — economists. Are countries with higher rates of unionization more or less economically competitive? We can take a first look by comparing measures of unionized workers in developed countries against a measure of those countries’ competitiveness.

The chart below plots unionization density rates from 2010, the most recent year we have comprehensive data available, against the 2010 GCI scores for 29 of the 33 OECD countries that year (the Czech Republic, Iceland, Hungary and Luxembourg did not have data available). In 2010, Switzerland was ranked No. 1 in competitiveness, while the United States was No. 2.

It seems that countries with higher rates of unionization density are slightly more economically competitive. Based on a simple regression, the relationship is significant, but the effect is extremely small.

Chosen excerpts by Job Market Monitor. Read the whole story at Do Fewer Unions Make Countries More Competitive? | FiveThirtyEight.