The health effects of wage setting institutions: How collective bargaining improves health but not because it reduces inequality

Abstract

Do wage‐setting institutions, such as collective bargaining, improve health and, if so, is this because they reduce income inequality? Wage‐setting institutions are often assumed to improve health because they increase earnings and reduce inequality and yet, while individual‐level studies suggest higher earnings improve well being, the direct effects of these institutions on mortality remains unclear. This paper explores both the relationship between wage‐setting institutions and mortality rates whether income inequality mediates this relationship. Using 50 years of data from 22 high‐income countries (n ~ 825), I find mortality rates are lower in countries with collective bargaining compared to places with little or no wage protection. While wage‐setting institutions may reduce economic inequality, these institutions do not appear to improve health because they reduce inequality. Instead, collective bargaining improves health, in part, because they increase average wage growth. The political and economic drivers of inequality may not, then, be correlated with health outcomes, and, as a result, health scholars need to develop more nuanced theories of the political economy of health that are separate from but in dialogue with the political economy of inequality.

Estimating Effects of Wages on Smoking Prevalence Using Labor Unions as Instrumental Variables

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When do democratic transitions reduce or increase child mortality? Exploring the role of non-violent resistance

“…Child mortality is an appropriate dependent variable because it is an important indicator of societal progress ( Sen, 1998 ), a key component of population health ( Reeves, 2021 ), and even a proxy for health inequalities, given that child mortality is often far higher among poorer households ( Baker et al, 2018 ). We use Ramos et al's long-run (more than 10 years) estimates of child mortality because the true impact of democratization on health takes time to emerge ( Gerring et al, 2012 ).…”

Does collective bargaining reduce health inequalities between labour market insiders and outsiders?

“…The share of the population that belongs to a union (union density) is associated with lower mortality in the population (Muntaner et al, 2002), better self-reported health (Dollard and Neser, 2013) and lower depression amongst the workforce, even for those who are not unionized (Reynolds and Buffel, 2020). Reeves (2021) shows that collective bargaining institutions reduce mortality and raise life expectancy at the country level. What is less well understood is for whom these beneficial effects apply.…”