02391cas a2200253 a 4500 AALejournalIMF016981 230101c9999 xx r poo 0 0eng d 5.00 USD 9781498380508 1018-5941 BD-DhAAL BD-DhAAL Hijzen, Alexander. No Extension without Representation? : Evidence from a Natural Experiment in Collective Bargaining / Alexander Hijzen, Pedro Martins. Washington, D.C. : International Monetary Fund, 2016. 1 online resource (39 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students In many countries, notably across Europe, collective bargaining coverage is enhanced by government-issued extensions that widen the reach of collective agreements beyond their signatory parties to all firms and workers in the same sector. This paper analyses the causal impact of such extensions on employment using a natural experiment in Portugal: the immediate suspension by the government that took office in 21 June 2011 of the (until then) nearly automatic extensions. The combination of this suspension and the time needed for processing the extension applications resulted in a sharp and unanticipated decline in the extension probability of agreements signed several month earlier around 1 March 2011. Our results, based on a regression discontinuity design and matched employer-employee-agreement panel data, suggest that extensions had a negative impact on employment growth. Moreover, the effects tend to be concentrated among non-affiliated firms. The lack of representativeness of employer associations is a potentially important factor behind the adverse effect of extensions. Another is the role of retro-activity in combination with the administrative delay in processing extensions. This is particularly relevant in the context of a recession. Mode of access: Internet Martins, Pedro. IMF Working Papers; Working Paper ; No. 2016/143 Full text available on IMF http://elibrary.imf.org/view/journals/001/2016/143/001.2016.issue-143-en.xml IMF e-Library