The impact that trade unions exert on the gender pay gap : evidence from a panel of European countries

Abstract

Governments and supranational organisations around the globe have placed a strong emphasis on addressing the Gender Pay Gap. As a result, various policies have been put into action in recent years to tackle this problem, and it remains a central focus in numerous policy discussions and agendas. The objective of this dissertation is to explore whether the participation of trade unions contribute to reducing this disparity. To arrive at a conclusion, the Fixed-Effects Model is employed, for a sample of nineteen European countries spanning a period of ten years from 2009 to 2018. The results obtained provide contradictory results as found in the existing literature. When running the model without incorporating fixed-effects, this study concludes that trade unions contribute to reducing the gap, which aligns with the majority of the literature consulted. However, when fixed-effects were included in the model, mixed results emerged. This is because when using both country and year fixed-effects the result was positive and insignificant. Moreover, when including solely country fixed-effects the coefficient on the trade union density rate while still positive, shows that it has a statistically significant relationship with the dependent variable, the gender pay gap. In addition, the same result as when the model was run without fixed-effects was also established when only year fixed-effects were included, since a negative statistically significant relationship was established.