Nordic Economic Policy Review 2025

This article offers an excellent and comprehensive overview of recent work on labour unions in Norway, encompassing a broad range of perspectives in a key area of ongoing academic focus. The renewed interest in unions in economic research stems from important labour market trends over recent decades, including rising inequality, declining worker power, increasing firm power, a shrinking labour share of income, and stagnant wage growth despite productivity gains. My comments highlight a few key aspects of the papers referenced by the author that I think are important but that the author may not have been able to discuss due to space constraints.

The article contrasts U.S. research, which often leverages union elections to identify the effects of unionization, with recent Norwegian research that primarily employs an instrumental variable approach, exploiting national reforms to subsidies for union dues. U.S. findings are generally negative, while Norwegian results are typically positive, leading the author to conclude that the effects of unions differ between the two countries. However, it is important to note that the parameters identified in these studies differ significantly from each other. U.S. research that relies on the union election approach captures an extensive margin response to unionization (whether a firm unionizes), whereas Norwegian research focuses on an intensive margin response (changes in local union density). Comparisons between these studies should therefore be approached with caution. This distinction also offers a valuable avenue for future research.

The issue of free-riders—workers who benefit from union activities without being members of the union themselves—is central to the union literature and is addressed explicitly in the article. Recent Norwegian research sheds new light on this topic by exploring the heterogeneous effects of individual union membership. In particular, recent work suggests a significant private goods component to individual union membership (Dodini, Salvanes, Willen, and Zhu, 2022). Even when controlling for collective bargaining agreements and local union density, individual membership has meaningful effects—not only in terms of legal services and job security but also in traditional union goods such as wages. Survey evidence provided in the same article indicates that workers also perceive unions as offering substantial private goods, adding important nuances to the free-rider discussion in the literature—at least from the workers’ perspective. This is a critical area for further study, both in Norway and internationally. 

Most research on labour unions and worker power focuses on stable economic conditions, examining union wage premiums, productivity, and wage-setting mechanisms, while holding all else constant. However, little is known about the role of unions in shaping firm responses to economic shocks, such as changes in input prices or supply chain disruptions. This dynamic is crucial for understanding the role of unions in market adjustments and for broadening our understanding of their impact on the economy. Contemporaneous work by some of the authors cited in this article has begun exploring this issue in Scandinavia (e.g., Silliman and Willen, 2024), and additional research in this area would be highly valuable.

While unions are traditionally believed to help workers with the weakest individual bargaining power, such as low-paid or marginalized groups, there are significant nuances to this assumption. Different worker types use unions in different ways, and unions may prioritize certain groups over others, particularly in countries with substantial local flexibility in how unions operate. For example, recent surveys in Norway show that immigrant and native workers utilize unions differently, with corresponding variations in membership effects (Dodini, Zhu, and Willen, 2022). Additionally, factors such as age, gender, and occupation also appear to shape the impact of unions and how workers use them, which introduces important nuances to our understanding of unions across different worker types. These variations have significant implications for equality and union effectiveness. 

While the article emphasizes the benefits of unions in Norway, it is also essential to consider their potential drawbacks. Based on the work cited by the author, unions may restrict access to firms, potentially impacting both efficiency and performance (Silliman and Willen, 2024). Furthermore, the costs associated with unionization may also be passed onto consumers, potentially causing some harm (Dodini, Stansbury, Willen, 2023). Finally, unions may not cater to the needs of all worker types, which could exacerbate inequality within firms (Dodini, Willen, and Zhu, 2024). These nuances highlight the complexity of union effects and the challenges involved in understanding their overall impact on the economy.

Recent Scandinavian research on labor unions has introduced novel data and advanced models to address long-standing questions in the literature. The findings reveal both winners and losers, uncovering previously overlooked nuances in the role of unions in shaping the labour market. These patterns highlight the need to update existing frameworks for understanding union influence, particularly in the Norwegian context. The author has done a phenomenal job discussing ongoing research on these topics, which I am certain will spur additional research in the future.