What do unions do in times of economic crisis? Evidence from Central and Eastern Europe

Abstract

Over the last two decades, trade union membership in Central and Eastern Europe has been in continuous decline, and unions in the region are generally considered weak. However, little is known about the actual relevance of trade unions for individual workers in the post-socialist world. We explore the role that unions played in protecting their members from the negative effects of the global economic crisis. Using data for 21 post-socialist countries from the Life in Transition-2 survey, we find that union members were less likely than comparable non-members to lose their jobs during the crisis. This beneficial effect of union membership was particularly pronounced in countries which were hardest hit by the crisis. At the same time, union members were more likely to experience wage reductions, suggesting that unions were engaged in concession bargaining. Overall, our results challenge the common view that unions in the post-socialist countries are irrelevant.