A Causality Analysis of Economic Growth and Union Density in European Countries

In this paper, we analyse the relationship between union density and economic growth using a Granger causality analysis and shocks analysis with vector autoregression model. We find that the Granger causality goes from the growth rate to the unionization rate in four of the 11 European countries under study. France bucks the trend: it is the only country in which union density influences economic growth, moreover in a positive way.