What Do Unions in China Do? Provincial-Level Evidence on Wages, Employment, Productivity, and Economic Output

Utilizing provincial-level data from the period of 1994–2008, this article studies the relationship between union density and wages, employment, productivity, and economic output in China. The findings indicate that union density does not affect average wage levels, but is positively associated with aggregate productivity and output. We discuss if and to what extent these findings are consistent with the familiar two faces of unions model and alternative explanations relevant in the context of Chinese labor and union institutions.