The Quality of Industrial Relations and Unemployment in Developing Countries

Using data from 45 countries for six years in the period 1995 to 2003, the author analyses whether the quality of industrial relations affects unemployment in developing countries. To measure the quality of industrial relations, the author uses the results of surveys in which senior business executives characterized the industrial relations of their countries of residence. According to the regression results, cooperative (confrontational) industrial relations are likely to lower (increase) unemployment. In general, the magnitude of the effect appears to be moderate. It seems to be small among women. The results are robust to variations in specification.