The Determinants of Union Growth in Taiwan: An Empirical Study

Abstract

Why trade unions grow has long been a major theoretical and empirical question in the study of Western industrial relations systems. The answers to this question revolve around economic and political factors. Economic factors include the business cycle, which covers the price index, unemployment rates, and nominal wage increases. Political factors may influence the growth and decline of trade unions in terms of changes in labor laws and public policies toward unions and employers.\nThis paper investigates the determinants of trade union growth in Taiwan from 1960 to 1994 by empirically testing whether the Western-based union growth model can be used in explaining union growth in Taiwan. This paper finds that unemployment rates have had a significant and positive effect on union growth in Taiwan; however, the consumer price index and wage levels in the manufacturing sector have not exerted significant effects. This paper also finds that political factors have had an important impact on the growth of unions in Taiwan.