Labor Market Regulation and Social Dialogue: A Qualitative Comparative Analysis

Abstract

The previous chapter established a positive relationship between wage flexibility and industrial conflict. In this chapter, I examine how labor market regulations affect the other component of the industrial relations picture: the ability of labor to cooperate with employers and the government. To that end, I construct a database of social pacts—formal agreements over labor market outcomes concluded at the national level between representatives of organiz ed labor, employers, and the government. Given the important role of social pacts in moderating labor conflict and maintaining a stable economy, this analysis highlights the detrimental effects of labor market flexibility on social cooperation.