Unions and Employment in Uruguay

This study examines the impact of unions on wages and employment using data from Uruguay in a period when unions were banned (1973-1984), then legalized with tripartite bargaining (1984-1991) followed by industry-wide or firm-specific bargaining (1992-1997). The paper begins with background on the economy, the labor market, and collective bargaining in Uruguay (Section II), followed by a brief theoretical overview on unions and labor demand (Section III) and a description of the data (Section IV). The labor demand results (Section V) indicate a structural shift in the labor demand function occurred at about the same time as the return of collective bargaining.