Determinants of the annual rate of change of union membership in divergent national contexts after the nations survive through major economic crisis

Abstract

PurposeWe were intrigued by the question of whether the convergence of businesses across nations in search of flexibility to survive economic crisis led to a convergence of the annual rate of change of union membership. The question emerged because the convergence theory was controverted, especially when the neo-capitalist idea failed to withstand the test of time during the economic crisis.Design/methodology/approachBy adopting the model from Bain and Elsheik (1976) and using time-series data from 1990 to 2014 for Finland and India that survived economic crisis during this period, whereby union membership remained steady in Finland but declined in India, we assessed the empirical distinction between the changes in union membership.FindingsWe argued that when hit by an economic crisis, different nations had divergent responses and chose different means of economic recovery because of which the countries have not withstood the crisis in one specific way/direction that at all times, marginalises unions. Our main finding is that in both the countries, the annual rate of change of union membership during the years of economic recovery was determined by the policy response. And, policy responses were determined not only by the causes of economic crisis but also by the strength of unique national institutional configurations and history of the country.Originality/valueThe annual rate of change of union membership during the years of economic recovery was determined by the policy response. And, policy responses were determined not only by the causes of economic crisis but also by the strength of unique national institutional configurations and history of the country.