The proportion of workers covered by collective agreements has fallen in most OECD countries over the last decades. One of the main ways governments can increase collective bargaining coverage is through mandatory extensions.
This is when the government extends a collective agreement so that it also applies to firms that did not sign the agreement. It is a policy that carries important implications for the division of power between the state and the social partners. It can also have considerable distributional consequences for the labour market. Countries vary greatly with regards to mandatory extension practices; while some extend sectoral agreements on a semi-automatic basis, others do so only in special cases, and still others have no legal mechanism for extending collective agreements. In this thesis I investigate the causes of this policy variation, with a focus on the role of political actors. I build on dominant strands of theory within comparative political economy to generate hypotheses. Empirically, I show that leftist parties and labour unions are important factors for explaining variation in mandatory extensions. The empirical strategy follows a mixed methods research design. Based on a time-series cross-sectional analysis of 33 OECD countries in the period between 1980 and 2017, I find that left-party government participation is associated with increased extension practice. Additionally, countries with high union density make more use of mandatory extensions. This relationship is less clear cut for very high union density rates, indicating that labour unions might fear that mandatory extensions create free-rider problems that can damage membership incentives. In addition, I conduct a case study of Norway, based on semi-structured interviews and policy documents. The Norwegian labour unions have been a driving force in promoting mandatory extensions, both in the creation of the Extension Act and in subsequent debates in the Tariff Board. Both the quantitative and the qualitative evidence shows that the political actors that represent wageearners play a key role in shaping mandatory extension practices.
