ABSTRACT
This study analysis causality between collective bargaining coverage rate and income inequality in 11 high-income OECD countries for the period 1977-2014. We use assymmetric causality test separating causal effect of positive shocks from negative shocks, which is suggested by Hatemi-j 2012 . According to the results of standard symmetric tests, there is a positive, statistically significant and one direct causal relationship from income inequality to collective bargaining coverage rate in France and Japan. However, assymmetric causality test results show that positive shocks on income inequality cause positive shocks on collective bargaining coverage rate only in Canada. On the other hand, in Japan, both positive and negative shocks on income inequality affect collective bargaining rate, so that if income inequality reduces, collective bargaining coverage rate diminishes. In this context, this study proves that collective bargaining challanges income inequality in spite of low unionization rates. Results show that labor rights are linked with low-income inequality rates only in three countries France, Japan and Canada
Keywords : Collective Bargaining, Income Inequality, Symmetricand Asymmetric Panel Granger Causality
