Institutional Change and Union Membership: A Longitudinal Analysis of Union Membership Determinants in Israel

Institutional Change and Union Membership:A Longitudinal Analysis of Union Membership

Determinants in Israel

Institutional Change and Union Membership

GEDALIAHU HAREL, SHAY TZAFRIR,and PETER BAMBERGER*

We examine the degree to which factors associated with workers’ union mem-bership decisions are sensitive to shifts in the institutional environment ofunions. Comparative logit analyses of the relationship between potential deter-minants of membership and actual union membership over time suggest thatthe factors associated with membership are elastic and may reflect shifts in theinstitutional context of unions.

Since its establishment as a formal social science discipline, a basicassumption in industrial relations theory has been that shifts in the eco-nomic and institutional environments of unions affect union density andthe propensity of workers to join and retain their membership in labororganizations. Indeed, the decline in union membership in the post-1970sin many industrialized nations has stimulated a surge in research focusingon the precise factors associated with union density and membership.Nevertheless, because of the obvious difficulties in doing so, researchershave for the most part failed to demonstrate conclusively the causal linkbetween institutional change and the propensity of different types ofworkers to be union members. Using Israel as a case in point, in this arti-cle we examine the implications of a profound shift in the nature ofcollective bargaining (from corporatism to enterprise-level bargaining)

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*Faculty of Industrial Engineering and Management, Technion-Israel Institute of Technology,Technion City, Haifa, Israel. E-mail: [email protected]. Names appear in random order. All threeauthors contributed equally to the writing of this article. We are grateful to Julian Barling and LindaDonahue for comments on an earlier draft of this article. An earlier version of this article was presented atthe 1997 Meeting of the Academy of Management, in Boston, Massachusetts.

INDUSTRIAL RELATIONS, Vol. 39, No. 3 (July 2000). © 2000 Regents of the University of CaliforniaPublished by Blackwell Publishers, 350 Main Street, Malden, MA 02148, USA, and 108 Cowley Road,

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and a revolutionary restructuring of the primary labor institution on thefactors associated with workers’ union membership decisions.

Previous Research

Using longitudinal research designs, most union density studiesattempt to link the rate of change in societal patterns of unionization toshifts in the rate of wage and economic growth, inflation, and unemploy-ment (Bain and Elsheikh, 1976, 1982; Sheflin et al., 1981; Troy andLoeller, 1981; Disney, 1990). Several of these studies have found that theunionized proportion of a society’s labor force is likely to rise during peri-ods of economic growth and higher inflation and decline during periodsof unemployment (Bain and Price, 1983; Price and Bain, 1983). Others(e.g., Stepina and Fiorito, 1986; Sheflin et al., 1981) find that the impactof these predictors of union growth and decline is far from stable overtime and is contingent on saturation effects.

Union density researchers also have examined (albeit to a lesser extent)the impact of institutional shifts on the proportion of the labor force that isunionized. For example, using a longitudinal design, Freeman andPelletier (1990) demonstrate that the shift in the political and legal con-text associated with the Thatcher government in the United Kingdom hada direct, negative impact on union density in that country. Usingcross-sectional data, Blanchflower and Freeman (1992) suggest that ashift away from centralized collective bargaining or corporatism has anegative impact on union density.

However, because the dependent variable in union density research isthe rate of unionization, such studies fail to provide insight into interestsand concerns of the individuals typically responsible for causing thechange in density rates to begin with, namely, the workers themselves.Thus, for example, on the basis of Freeman and Pelletier’s analysis, weare unable to determine the impact of “Thatcherism” on the likelihood ofpublic-sector employees to be union members or on the role played byworker political ideology in membership propensity.

Because they take workers as the actual unit of analysis, union mem-bership studies are essential to explain the dynamics underlying thecontext-related shifts in density. The goal in union membership researchis to determine the “composite profile” of a union member, i.e., the likeli-hood that a worker employed in a certain sector, having certain demo-graphic attributes, and holding certain attitudes and beliefs will be a unionmember.

Institutional Change and Union Membership / 461

However, precisely because they use the worker as the unit of analysis,the bulk of union membership studies tends to be cross-sectional innature. Consequently, the composite profile generated tends to be aone-time “snapshot,” making it difficult to assess the precise impact ofeconomic or institutional change. At best, such studies attempt to linkthose factors associated with union membership in a given society tospecific elements of the institutional context within which labor-management interactions in that society occur (see, e.g., Deery and DeCieri, 1991). Therefore, the link between institutional change and a shiftin the composite profile of a union member has been inferred on the basisof cross-cultural comparisons only. While Windolf and Haas (1989) useda longitudinal design to directly examine the impact of a contextual shifton the composite profile of union members in Germany, their focus wason a shift in the economic context (i.e., changing levels of unemploymentfrom the 1970s to the 1980s). Thus the issue of whether and how a shift inthe institutional context within which labor-management relations occuraffects the composite profile of union members remains open to directempirical examination.

Linking Institutional Shifts and Union Membership

A number of profound shifts in the institutional context of labor-management relations in Israel over the past 14 years make it an interest-ing laboratory for examining the sensitivity of the factors explainingworkers’ union membership decisions to jolts in the institutional environ-ment. Drawing from institutional theory (Jeperson, 1991:151), we groupthese shifts into two categories. The first category includes those shiftshaving to do with industrial relations “regime” or more permanent set ofrules and structures (i.e., “the legal or constitutional system” according toJeperson, p. 151) framing and legitimizing labor-management inter-actions. The second includes those shifts having to do with the primarylabor organization in Israel, the Histadrut, or General Federation of Labor(GFL).1

Shifts in the industrial relations regime. Until the mid-1980s, theIsraeli industrial relations system was characterized by “a very high rate

462 / GEDALIAHU HAREL, SHAY TZAFRIR, AND PETER BAMBERGER

1 If we view the industrial relations system as an institution [“a socially constructed, routine-reproduced(ceteris paribus) program or rule system”—Jeperson, p. 149], these two categories of regime and organiza-tion reflect the two main carriers of institutionalization in institutional theory. The distinction is importantin this case because while shifts in one institutional carrier can drive shifts in the other, these shifts need notyield parallel effects.

of unionization (i.e., 90 percent of wage earners)” and could be describedas having been highly corporatist in nature (Haberfeld, 1995:659). Spe-cifically, there existed a labor-management framework in which “nationaltrade union elites undertook to coordinate and limit worker demands onthe basis of understandings or agreements with the state and organizedemployers” (Shalev, 1992:6).

Inherent in this corporatist regime was a system of centralized,economy-wide collective bargaining and a tacit tradeoff of labor peace inreturn for full employment (on the one hand) and government subsidies toprivate-sector employers in return for pay acquiescence (on the other). Byauthorizing the Minister of Labor to “extend the terms of a collective-bargaining agreement to all employees in the labor market and to extendthe terms of a collective-bargaining agreement signed at the industrial oroccupational level to all employees in this industry or occupation—eventhose working for employers that are not a party to the agreement”(Haberfeld, 1995:660), national union elites could rest assured that laborwould, in effect, be taken out of competition.

However, as Shalev (1992) explains in detail, this corporatist frame-work led to the spiraling inflation and near economic collapse of Israel inthe mid-1980s. Israel’s retreat from a corporatist industrial relationsframework was already hinted at prior to the 1980s (Chermesh, 1993).Yet the adoption of more liberal trade and capital policies and trimmingof employer subsidies as part of the 1985 “economic stabilization plan”(Shalev, 1992:334), as well as the economic collapse in the mid-1980s ofthe GFL’s network of enterprises (used by national union elites to cooptlocal labor leaders into accepting labor peace) sealed the fate of Israel’scorporatist industrial relations regime (Chermesh, 1993:240).

As a result, since the mid-1980s, both local and national unions havegained greater control over their own destiny. Chermesh (1993:137) notesthat whereas the period prior to the 1980s was characterized by “little dif-ferentiation and a highly centralist Histadrut (GFL),” by the 1980s, thecentral bodies of the GFL became “increasingly reluctant to impose con-trol on their affiliated unions.”

However, the institutional change at the level of the industrial relationsregime was apparent not only in terms of the shift from corporatismto decentralized bargaining but also in terms of the changing role of thegovernment in the industrial relations system. For example, while theMinister of Labor’s right to extend collective agreements to those work-ers not covered has not been revoked, beginning in the mid-1980s it wasused on an increasingly selective basis. Furthermore, as Chermesh(1993:137) notes, “institutionalized measures for dispute management


have become ineffective,” and despite their legal obligation to do soaccording to the Settlement of Labor Disputes Law of 1957, “strikingparties tend to avoid reporting to the [government’s] Labor RelationsOfficer.” However, while direct government intervention in collectivebargaining has been on the decline, government protection of workerrights has been on the rise. For example, Israel’s first equal employmentopportunity law with any serious effect was adopted in 1988 and strength-ened in 1992.2

Finally, institutional change at the level of the industrial relationsregime is apparent in terms of the increasing willingness of employers tochallenge the legitimacy of the workers’ committees and collective agree-ments. Whereas prior to the mid-1980s employers took for granted theexistence of workers’ committees and collective bargaining and rarelysought to avoid unionization or to challenge their authority and power, bythe mid-1990s, employers began to adopt tactics designed to break theexistence of the union.

Shifts in the primary labor institution, the GFL. Founded in 1920, theGFL was until recently the major institution in Israel’s industrial relationssystem. Unlike labor unions elsewhere, the initial functions of the GFLwere to provide (1) employment opportunities to Jewish workers in Pales-tine by establishing worker-owned cooperatives and enterprises and run-ning local employment exchanges and (2) welfare (e.g., health care) andsocial services (e.g., education, sports) unavailable from the mandatorypowers controlling Palestine at the time. As Haberfeld (1995:659) notes,“the collective bargaining function was adopted by the GFL at a laterstage.” Thus individuals became members of and paid their dues to theGFL and subsequently were assigned to a trade union based on their occu-pation or place of employment. In fact, one did not have to be a worker inorder to become a member. GFL membership was and continues to beopen to workers, managers, homemakers, and the unemployed. Until1959 (when the state took the employment exchange out of the hands ofthe GFL), many workers felt obligated to become GFL members in orderto receive employment services. Until the passage of the 1994 NationalHealth Insurance Law, many individuals joined the GFL to receive themedical care it provided.

Because members belonged to and paid dues to the GFL and not totheir assigned unions, these unions were funded by and traditionally


2 This legislation went far beyond the 1964 Equal Pay Act, widely recognized as an ineffective meansby which to ensure equal employment opportunity (Ben-Israel, 1989).

controlled by the central GFL leadership. This leadership was, until 1994,elected by the GFL’s membership on the basis of party slates, withIsrael’s Labor party consistently serving as the dominant political forcewithin the GFL. By controlling the GFL and, in turn, the Trade UnionDepartment (the central GFL agency responsible for coordinating theactivities of individual unions including all matters related to collectivebargaining), the various unions, and even many of the enterprise-levelworkers committees,3 the Labor party attempted to ensure thatlabor-management relations and collective agreements were consistentwith the party’s more general economic and social objectives for the stateas a whole (Shalev, 1992). It is with this in mind that Friedman (1972:xvi)described the GFL at the time as a political union “concerned with theneeds of the state and the economy more than it is concerned with theneeds of the workers.”

Over the years, in addition to its network of health, social service, edu-cational, and athletic organizations, the GFL developed a network oflabor-owned economic enterprises dominating almost every industrialsector in the country and making the GFL, after the government, the pri-mary employer in Israel. Indeed, workers often joined the GFL as a meansby which to gain employment in GFL-owned enterprises. However,because even the economic enterprises were (until 1988) often run on anonprofit basis (i.e., the formal goal was to provide employment, particu-larly in outlying areas), the GFL relied on extensive government subsi-dies.4 With the rise to power of the Likud in 1977 and the subsequenteconomic crisis of the state in the early 1980s, the GFL began to experi-ence its own economic crisis. By 1988, this crisis was severe enough toforce the GFL leadership to grant an unprecedented level of autonomy tothe managers of its economic enterprises, each of which was to be consid-ered, for the first time, an independent profit center. Consequently, for thefirst time managers were able to consider workforce reductions and payfreezes in order to ensure the economic viability of the labor-owned com-panies. By 1993, the GFL health fund was rationing medical supplies toits hospitals and clinics, and several of its largest enterprises were eitherbankrupt or close to it.


3 While these committees were, in almost all cases, inaugurated by the GFL and not the workers them-selves, over time, the GFL central ledership lost control over them. As stated by Haberfeld (1995:660), aftertheir establishment, these committees tended to “adopt a more militant attitude than the one held by nationalunions and the Trade Union Department, and very often this difference is manifested in wildcat strikesdeclared by the committees.”

4 While profitability was a factor for all GFL enterprises, our point is that prior to the 1980s, these firmsalso performed critical political functions for the state, the Labor party, and even private industry.

Despite the internal GFL reforms of the late 1980s, by 1994 the pri-mary labor institution in Israel was itself on the verge of bankruptcy andtotal collapse. GFL membership had declined to between approximately40 percent of the Israeli civilian labor force (Report of the Chairman,1995), and only 60 percent of all workers [as opposed to 80 percent in1982 (Haberfeld, 1995:660)] were covered by collective agreements. Inan election upset, the Labor-led coalition of GFL appartchniks wasdefeated and replaced by an insurgent coalition of young reformists. Thisnew administration proposed and began to implement a major program ofrestructuring, in turn creating “The New GFL.” Among the key elementsof this new program were the following (Report of the Chairman, 1995):

1. Support for the government’s proposed National Health Insur-ance Law and the spinning off of the GFL’s network of laborato-ries, hospitals, and clinics into an independent and unaffiliatedhealth maintenance organization.

2. Elimination of the GFL’s role as employer and the sale of alllabor-owned economic enterprises. Membership dues wouldbecome the single source of income for the GFL and its mem-ber unions, requiring GFL unions to negotiate for union secu-rity clauses in their collective agreements for the first time.5

3. An increased focus on trade union activities and the strengthen-ing of the unions and their bargaining power by means ofincreased funding for the Trade Union Department and throughthe merging of affiliated unions (i.e., reducing the number ofaffiliated unions from 44 to 20). Whereas in the past workerscommittees had to consult with regional GFL officials (them-selves elected on the basis of party slates) before taking a caseto the Labor Court, signing a collective agreement, or declaringa strike, as of 1995 they were able to do so directly. As a resultof the 1994 restructuring, the number of regional directorateswas slashed (from over 60 to around 20), and those remainingwere given other alternative responsibilities (e.g., organizingnonunion enterprises, steward training).

4. Depoliticization of the GFL. Beginning in 1996, betweenone-third and one-half of all representatives to the main GFLdecision-making body were elected directly (the remainder, on


5 As of 1997, per an agreement with the GFL, the Israel Manufacturers’ Association began to collectunion dues (0.9 percent of monthly pay) or agency fees (0.7 percent of monthly pay) from all workers cov-ered under a GFL-negotiated collective agreement. In addition, individual workers’ councils continued tonegotiate local dues-payment arrangements with individual employers.

the basis of party slate). All elections for trade union and work-ers committee offices were conducted on a personal (i.e., notparty) basis. Nonmembers covered under a GFL-negotiatedcontract would be allowed to vote in union and worker commit-tee elections.

Thus, if the GFL prior to the change could be viewed as a politicalunion with a focus on a wide range of national affairs, the “new” restruc-tured GFL is modeled very much in the tradition of an economic laborinstitution with a focus on the affairs of the workers and their workplace.

Union membership decisions and institutional change. Industrial rela-tions theorists have proposed seven main categories of explanationsregarding workers’ union membership decisions (Guest and Dewe, 1988;Wheeler and McClendon, 1991). The first has to do with union instru-mentality (Newton and Shore, 1992) or the union wage premium.According to this explanation, workers join unions because of the expec-tation of higher wages (Farber and Saks, 1980), greater job security, or anoverall improvement in employment conditions.6

The second explanation is based on the notion of “collective voice” andthe idea that workers join unions to seek relief from various sources of jobdissatisfaction (Freeman and Medoff, 1984). Heneman and Sandver(1983:539) conclude that between 25 and 50 percent of the variance invoting may be explained by employee satisfaction levels.

Haberfeld (1995:656) claims that in the period prior to the shift inIsraeli industrial relations and the “reinstitutionalization” (Jeperson,1991) of the GFL, these “two prevailing explanations of workers’ deci-sions to join unions were irrelevant.” Both explanations were ruled out,according to Haberfeld, because (1) given the centralized nature of col-lective bargaining and Israel’s corporatist industrial relations framework,“there was no union wage premium in Israel” (p. 656), and (2) with nearlyall wage earners covered by collective agreements, essentially “all work-ers were protected by unions regardless of their union status” (p. 656).Not surprisingly, therefore, in his analysis of data from 1982 (the periodprior to the institutional shift described earlier), Haberfeld finds greater


6 However, as Haberfeld (1995:657) notes, associated with this explanation may be two contradictoryeffects. On the one hand, since workers may “‘buy’ union representation just as they buy other goods,” theremay be a positive link between wage levels and unionization. On the other hand, since workers may beinfluenced by the “supposed pay-enhancing instrumental role of unions, the demand for union services maybe greater among lower paid workers,” thus suggesting an inverse relationship.

support for four of the five remaining explanations of union membership.These are

1. Consumerism. Membership is sought and retained because ofthe services and commodities (e.g., health insurance, discountplans, legal aid) often associated with membership (Towers,1989).

2. Political/ideological beliefs. Since unions often are affiliatedformally or informally with a political party and (as in the caseof pre-1994 Israel) deeply politically involved, “workers mayjoin unions as a result of their political beliefs” (Haberfeld,1995:658). For example, Smith’s (1987) findings suggest a linkbetween French workers’ socialist ideologies and their propen-sity to be union members, and Barling et al. (1992:112–113)review a series of studies with similar findings.

3. Union-related social values. Because opposition to partieswith left-leaning agendas need not coincide with opposition tocollective action, even right-leaning workers may still join aunion if they place value in collective action and see the unionas an effective mechanism for work-related collective action.7

Thus the more workers believe that solidarity and collectiveaction are legitimate means by which to achieve desired ends,the more likely these workers should be to join unions(Goldthorpe et al., 1968).

4. Work-related and individual factors. While union densityresearch suggests that the distribution of employees by age,gender, education, and ethnicity may influence union member-ship decisions, these factors may be highly correlated withother explanations such as collective voice in the case ofethnicity and gender (Bamberger et al., 1995) and union instru-mentality in the case of such work-related factors as organiza-tional size and sector. Haberfeld (1995:658) treats these factorsas controls “hypothesized to be related in unknown way[s] tothe decision to join a union” because of the mixed empiricalresults (Wheeler and Mclendon, 1991) and because of the lackof a comprehensive theory linking such variables to unionmembership.


7 Approximately 28 percent of GFL members belong to the right-leaning Likud party.

A seventh explanation concerns “bureaucratic pressure,” or the degreeto which “different forms of coercion which allow unions to inflict nega-tive incentives upon free riders or to grant positive rewards to union mem-bers” exists in the workplace (Windolf and Haas, 1989:148). Streeck(1981) suggests that a form of quasi-obligatory membership enforced byworks councils helped stabilize union membership in Germany duringperiods of adverse economic and political conditions. Windolf and Haas(1989:155) found further empirical support for such a notion, “pointing tothe growing role of the works councils in recruiting and keeping unionmembers.”

We hypothesized that the profound shifts in the industrial relationscontext and the nature of the primary labor institution (the GFL)described earlier would be reflected in a parallel shift in the factors asso-ciated with union membership in Israel. Specifically, with the eliminationof corporatism and centralized bargaining, we expected the collectivevoice, union instrumentality (union wage premium), union-related socialvalues, and bureaucratic pressure factors to increase in relative impor-tance. Thus we hypothesize:

Hypothesis 1: Collective voice, union instrumentality,union-related social values, and bureaucratic pressures will havea significantly greater impact on the probability of union member-ship in the period subsequent to institutional change than in theperiod just prior to it.

With the spinning off of the GFL’s health fund, insurance funds, andother enterprises and the depoliticization of its administration, we alsoexpected consumerism and political beliefs to decrease in relative impor-tance. That is, we also hypothesize:

Hypothesis 2: Consumerism and political beliefs will have a sig-nificantly weaker impact on the probability of union membershipin the period subsequent to institutional change than in the periodjust prior to it.

Method

Analytical approach. In order to test these hypotheses, we comparedthe coefficients generated by a logit analysis (Haberfeld, 1995) of datacollected in 1982 (prior to the changes in the Israeli industrial relationssystem and its primary labor institution, the GFL) with those generated by


an identical analysis of primary data collected by us in 1996 (subsequentto the changes in the Israeli industrial relations system). The 1982 datawere collected by an Israeli polling organization (Dachaf) and are basedon a national probability sample of 1800 Jewish labor force participants(response rate was 48 percent with complete data on 400 respondents; formore sample information, see Haberfeld, 1995). In order to ensure modelcomparability, we based both our 1996 sampling strategy and measureson those used by Dachaf.

1996 Sample. Interview data were collected on the basis of a nationalrandom sample of 750 Jewish participants in the Israeli labor forcebetween the ages of 18 and 70. We limited our sample to salaried, civilianlabor force participants for the reasons specified by Haberfeld(1995:662), as well as to facilitate a comparative analysis of the two datasets. The need for a comparative sampling framework also led to the deci-sion to exclude Israeli Arabs (excluded in the 1982 sample) from the 1996sample. Israeli Arabs accounted for approximately 15 percent of GFLmembers in 1982 and 17 percent of GFL members in 1996 (GFL, 1996).Also excluded from both the 1982 and 1996 samples were legal foreignlaborers (not including Palestinians from the Palestinian Territories), whocomprised a negligible portion of the work force in 1982 but over 3percent of the labor force in 1996, as well as day laborers from the Pales-tinian Territories and Lebanon (7 and 2.3 percent of the labor force in1982 and 1996, respectively). These groups of workers were excludedbecause, as nonresidents of Israel, they are ineligible for membership inthe GFL.

Given our 64 percent response rate and the exclusion of 82 cases eithermissing data or covering nonsalaried labor force participants, we basedour 1996 analysis on a data set that included 232 members of the GFL and166 nonmembers. This ratio of members to nonmembers is consistentwith current estimates of the proportion of GFL membership in the laborforce as a whole. Furthermore, whereas women comprised 45.7 percent ofthe Jewish labor force in Israel and 52 percent of GFL members in 1994(GFL, 1996), they account for 48.5 percent of our total 1996 sample[a difference of 2.8 percentage points as compared with a difference of10.7 percentage points with respect to the 1982 data analyzed byHaberfeld (1995)] and 59 percent of the GFL members in our sample.Similarly, our data closely reflect the proportion of certain age groups inIsraeli society at large (e.g., 67 percent of our sample was between theages of 18 and 44, whereas in the population at large, 70 percent fell in thesame age category).


Measures. Basing our measures on those used by Dachaf in 1982, ourdependent variable, membership in the GFL, was measured by a dummyvariable if the respondent was a member in 1996. Similarly, our inde-pendent variables were identical to those examined by Haberfeld (1995)with respect to the 1982 data (see Table 1). Thus the collective voice fac-tor was operationalized in terms of a key element of job satisfaction,namely, perceived pay equity (Hackman and Oldham, 1975). In theirmetaanalysis, Premack and Hunter (1988) found such perceptions to beboth directly and indirectly predictive of individual unionization deci-sions. Respondents in both 1982 and 1996 were asked to indicate on afive-point scale the degree to which they earn (1) much less versus (5)much more than they deserve.


TABLE 1

EXPLANATIONS OF UNION MEMBERSHIP AND THEIR EMPIRICAL REFERENTS

Explanation tested Measures used Justification

Union instrumentality Natural log of a categorical pay item Union instrumentality perceptionsfound to be higher amonglower-paid workers.

Collective voice Perceived pay equity Workers join unions in order to seekrelief from various sources of jobdissatisfaction.

Consumerism Family income; geographic location Those with lower family incomes aremore interested in such union benefitsas discount plans, legal aid, etc.Workers residing outside large citiesare more dependent on union-providedhealth, child care and leisure-relatedbenefits to the lack of competitivelypriced alternatives.

Political/ideologicbeliefs

Identification with the political leftor right as compared with thoseidentifying with neither the leftnor the right.

Since Israeli unions are often formally orinformally affiliated with politicalparties, workers may join unions as aresult of their political beliefs.

Union-relatedsocial values

Support for socialist versus capitalisteconomic policies; militancy (i.e.,support for a more active union in theworkplace); importance attached tohigh pay and job security.

The more workers believe that solidarityand collective action are a legitimatemeans by which to achieve desiredresults, the more likely they are to jointhe union, irrespective of their partyaffiliation.

Work-related andindividual factors

Occupational prestige; employmentsector; org. size; managerial position;labor market experience; variousdemographic correlates(e.g., gender, education).

Control variables

Bureaucratic pressure Existence of an active workers’committee in the work place.

Workers’ committees may stabilize unionmembership by inflicting sanctions on“free-riders.”

Lack of relevant data precluded a direct test of the union instrumental-ity explanation. However, in a number of studies (e.g., Kochan, 1979;Brett, 1980; Premack and Hunter, 1988), instrumentality perceptions con-sistently have been found to be inversely related to pay. Consequently,the instrumentality explanation was tested on the basis of a pay-basedproxy. Like Haberfeld (1995:662), we measured pay as a categorical vari-able, using the natural log of each category’s midpoint.

The consumerism (nonwork utility) explanation was operationalized interms of the same two indirect measures used by Haberfeld (1995): (1) a20-category family income item for which we used each category’smidpoint and (2) geographic location [“a dummy variable indicating resi-dence in one of Israel’s three largest cities” (Haberfeld, 1995:664)].Haberfeld (1995) assumed that respondents with lower family incomesand those residing outside of large cities (and thus more dependent on theGFL’s network of health facilities) would be more likely to join the GFLand that such a positive relationship would indicate support for the con-sumerism explanation.

Like Haberfeld, we operationalized political ideology in terms of twodummy variables corresponding to an identification with either the politi-cal left or right as compared with those identifying with neither the leftnor the right. Similarly, we examined the same five indicators ofunion-oriented beliefs and values used by Haberfeld. First, we measuredsupport for socialist (versus capitalist) economic policies, a proxy forworkers’ belief in collective action. A dummy variable (with 1 indicatingsupport for socialist policies), “it indicates a belief in interpersonal andgroup equality as opposed to individualistic methods of reward alloca-tion” (Haberfeld, 1995:662). Second, in order to tap militancy, respon-dents were asked whether they sought a more active union in theworkplace (1 indicates yes, 0 indicates no). In addition, respondents wereasked to indicate the importance they attach to (3) high pay and (4) jobsecurity (both on the basis of five-point scales, with 1 being “the leastimportant attribute” and 5 being “the most important attribute”). Finally,respondents were asked whether or not they support the continuation of atenure system in which no worker can be fired without approval from theworkers’ committee (i.e., a dummy variable with 1 indicating support).

In order to facilitate comparison with the 1982 data, we made an effortto use the same wording used by Dachaf for the attitudinal andbelief-based variables. As such, the 1996 data also focus not so muchon respondents’ views of the GFL’s instrumentality with respect to theirown jobs but rather, like Haberfeld (1995:663), on their “attitudes towardcollective action, ‘voice,’ and equality as general principles.”


In order to tap the “bureaucratic pressure” explanation, we (likeDachaf) asked respondents whether or not there existed an active workerscommittee where they worked (a dummy variable coded as 1 if yes).

We also included the same control variables used in Haberfeld’s analy-sis of the 1982 data. First, we included those factors potentially moderat-ing the relationship between membership and social and political beliefs,namely, dummy variables coded as 1 for religious persons and those arriv-ing in Israel at the age of 15 or older (both potentially affecting individualsvalues). Second, we included those same work-related and individual vari-ables used by Haberfeld (and operationalized in an identical fashion).These were (1) occupational prestige [measured using Tyree’s (1981)100-point scale], “used to control for the effect of occupations on unionmembership” (Haberfeld, 1995:663), (2) sector of employment (1 if publicor GFL-owned), (3) organization size (coded as 1 if the individual wasemployed in an organization employing over 100 employees), (4) manage-rial position (1 if yes; a proxy for level in the organizational hierarchysince managers also can be GFL members), and (5) a number of demo-graphic correlates of union membership including gender, age, its squaredterm, marital status, education (operationalized in terms of two dummyvariables, one for academic degree and the other for a high school diplomawith 1 for yes), and ethnic origin [also operationalized in terms of twodummy variables in each case coded as 0 if native born and 1 for individu-als of European-American origin (Westerners) or, in the case of the seconddummy, for individuals of Asian-African origin].8 The inclusion of thesedemographic control variables also allows us to take into account theimpact that any underlying shift in the demographic composition of theworkforce may have on the determination of union membership.

Finally, the same caveats that Haberfeld noted in his study with respectto the 1982 data (1995:665) apply with respect to the current analysis.These include (1) the questionable construct validity of some of the vari-ables examined, particularly those relating to attitudes and beliefs (all ofwhich are one-item variables), (2) the possibility that the causal linkbetween the independent variables and GFL membership may in fact beprecisely the opposite of that assumed thus far, and (3) the use of pay as aproxy for perceived union instrumentality.


8 For the latter, Haberfeld (1995:663) assumed that Westerners tend to hold an advantage over Easternersin most aspects of socioeconomic status.

Results

Changes in the composition of the GFL’s membership. As can be seenin the far-right columns of Table 2, the profile of members and nonmem-bers changed significantly between the years 1982 and 1996 across anumber of parameters. For the most part, these shifts were in the samedirection for both members and nonmembers. Two key exceptions are theshifts with respect to age and equity perceptions. While the mean age ofmembers increased significantly over the 14-year period under study, themean age of nonmembers declined significantly. This may be explainedby the dramatic increase in the number of jobs in the predominantly non-union high-technology sector, the disproportionately large numbers ofyounger workers employed in this sector, as well as the lack of job growthin the predominantly unionized sectors. With regard to equity, whereasthere was no significant shift in the perceptions of members, the level ofpay equity perceived by nonmembers in 1996 was significantly greaterthan that perceived by members in 1982. This may be explained by thefact that a large number of nonmembers are employed by firms in thegrowing high-technology sector. As noted by Bamberger et al. (1995),nonunion firms in this sector tend to adopt a “market leadership” strategywith respect to pay and typically attempt at least to matchunion-negotiated pay levels for specific occupations.

Also notable are the relatively substantial shifts with respect to publicemployment (sector), the proportion of urban residents (geographic loca-tion), and the proportion of married workers. The decline in publicemployment is most likely a function of the privatization process begunalready in the late 1980s. The decline in the proportion of urban dwellersis most likely a function of the rapid rise in the cost of urban real estatethat began with the influx of Russian immigrants in the late 1980s, as wellas government incentives for citizens to move to peripheral areas. Thedeclining proportion of married workers most likely reflects the 50 per-cent increase in the divorce rate in Israel between the years 1980 and 1996(Central Bureau of Statistics, 1997). Finally, the sharp decline in the sup-port for socialist policies by Israelis may reflect the fact that between theyears 1977 and 1994, the Likud party with its liberal economic ideologywas the party in power.

Other shifts in the profile of the workforce between 1982 and 1996deserve explanation as well. The dramatic increase in the proportion ofacademic degree holders and occupational prestige, as well as the declinein the proportion of religious people in Israel, is most likely a direct con-sequence of the influx of some 900,000 highly educated but nonreligious


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immigrants from the former Soviet Union. Despite this immigration, sim-ple cohort effects explain the decline in the proportion of foreign-bornJews in Israel. Over the 14-year period under study, a workforce cohortdominated by foreign-born Jews was replaced by a much larger cohortdominated by a Baby-Boom generation of native Israelis.

Of more direct relevance to our hypotheses, however, we comparedthe differences between members and nonmembers in 1982 with those in1996. While there continues to be differences between salaried workersthat were members of the GFL in 1996 and those who were not, thenature of these differences appears to have shifted over the 14-yearperiod examined. As can be seen in Table 2, these shifts are apparent notonly with regard to the demographic and labor market characteristics ofmembers and nonmembers but also with regard to the attitudes andbeliefs of members/nonmembers as well.

In 1982, there were no significant9 demographic differences betweenmembers and nonmembers. However, substantial demographic differ-ences between members and nonmembers are apparent with regard to the1996 data (with these differences, as suggested earlier, most likely a func-tion of a shift in the profile of members than that of nonmembers). Spe-cifically, in 1996 the mean age of members was significantly greater thanthat of nonmembers. In addition, a significantly larger proportion ofmembers than nonmembers also reported being married. Furthermore, in1996 there was a significant difference in the gender composition ofmembers versus nonmembers, with women comprising the majority ofmembers and men comprising the majority of nonmembers.

Although Haberfeld (1995) did find significant differences in the labormarket characteristics of members and nonmembers, these too appear tohave shifted over time. Specifically, as in 1982, a higher proportion ofnonmembers was employed in the private sector in 1996. However, asindicated by the large increase in the percentage of private-sector employ-ees reporting nonmembership (from 54 to 81 percent), this gap appears tohave widened. Whereas a higher proportion of those joining the GFL thanof those who did not was found in peripheral areas in 1982, in 1996 therewas no significant difference. On the other hand, unlike the case in 1982,in 1996 a significantly higher proportion of those joining the GFL than ofthose who did not was found employed in enterprises with an activeworkers’ committee and in enterprises employing over 100 workers. Dif-ferences in the amount of pay received by members versus nonmembersdeclined from 1982 to 1996, but in neither year were these differences


9 Significance is noted if p < 0.05.

significant. However, whereas there was no significant difference in theaverage family income of members versus nonmembers in 1982, in 1996the difference (in favor of members) was significant.

Regarding economic and social beliefs, GFL members in 1996 voicedgreater pay dissatisfaction (in terms of equity) than nonmembers, whereasin 1982 no significant differences were apparent. Furthermore, whereasin 1996 a significantly higher proportion of GFL members than non-members supported socialist (rather than capitalist) policies, in 1982 thisdifference was relatively marginal and not significant.

Changes in membership determinants. Before examining the shift inmembership determinants between 1982 and 1996, like Haberfeld (1995:666), we first investigated the possibility of a reciprocal relationshipbetween union membership and pay. We did this by estimating tworegression equations in which, for both, pay was the dependent variable.In the case of the first equation, membership was one of the independentvariables. In the case of the second equation, presence of an active work-ers’ committee was among the independent variables.10 As in the case ofthe 1982 data, the 1996 coefficients for both independent variables werefound to be not significantly different from zero. Thus, in the case of boththe 1982 and 1996 data sets, it is unlikely that pay differentials wereaffected by GFL membership or the actions of workers’ committees(Haberfeld, 1995:666).

Next, applying the same model and approach (i.e., an individual-levellogit model) used by Haberfeld (1995), for each observation i, we esti-mated the probability of i being a GFL member in 1996. In order to deter-mine whether the coefficients generated in the analysis of the 1982 datawere significantly different from those generated in our analysis of anidentical model using 1996, a t test was used. We estimated t according tothe formula t = b1 − b2/�(S.E.2

1 + S.E.22). The t test was deemed preferable

to a Chow test because the latter yields only model-level equivalencyresults, whereas our research question demanded the assessment ofparameter-level equivalency (Bamberger et al., 1995). The results pre-sented in Table 3 indicate that the determinants of union membership inIsrael did indeed change during the 14-year period under examination.


10 In both cases we used the same list of independent variables used by Haberfeld (1995:666), namely,membership, academic degree, high school, age, labor market experience and its squared term, occupa-tional prestige, public versus private sector, organizational size, geographic location, managerial position,number of hours worked, gender, marital status, Western versus Eastern origin, immigrant, and importanceof high pay and of job security.

TABLE 3

RESULTS OF REGRESSION ANALYSIS FOR UNION MEMBERSHIP

Variable

1982a

Coefficient(s.e.)

1982OddsRatioc

1996Coefficient

(s.e.)

1996OddsRatio tb

Pay −0.987*(−0.438)

−.17 −1.294*(0.628)

−.31 0.40

Academic degree 0.214(0.486)

.04 −1.119*(0.498)

−.27 1.91*

High school 0.459(0.361)

.10 −0.544(0.570)

−.13 1.49

Age 0.068(0.103)

.01 0.210(0.155)

.05 −0.76

Age squared −0.0003(0.0007)

.00 −0.0013(0.0019)

.00 0.49

Occupational prestige −0.001(0.0053)

.00 0.0102(0.012)

.00 −0.83

Sector 1.074**(0.329)

.18 1.245**(0.418)

.30 −0.32

Organizational size −0.266(0.309)

−.04 0.8475*(0.362)

.21 −2.34**

Geographical location −1.55**(0.503)

−.26 −0.245(0.338)

.06 −2.15*

Manager −0.043(0.307)

−.01 −0.3304(0.4254)

−.08 0.55

Workers’ committee 0.668*(0.308)

.11 1.8881**(0.432)

.46 −2.30*

Gender 0.691(0.360)

.12 0.8658(0.444)

.21 −0.31

Married −0.216(0.432)

−.04 0.5329(0.493)

.13 −1.14

Western −0.292(0.384)

−.05 −0.2161(0.478)

−.05 −0.12

Eastern −0.387(0.440)

−.07 −0.9929(0.621)

−.24 0.80

Religious 0.087(0.311)

.02 −0.2974(0.377)

−.07 0.79

Immigrant −0.212(0.424)

−.04 −0.1291(0.612)

−.03 0.11

Family income 0.00002(0.000016)

.00 0.0001(0.000074)

.00 −1.05

Importance of high pay 0.094(0.112)

.02 0.3402(0.284)

.08 −0.81

Importance of job security 0.247*(0.106)

.04 1.0202**(0.221)

.25 −3.16**

Equity −0.058(−0.176)

−.01 −0.5655*(0.230)

−.14 1.75*

Tenure 0.442(0.311)

.08 −0.6717(0.389)

−.16 2.24*

Militancy 0.688*(0.300)

.12 −0.0213(0.342)

−.01 1.56

Socialist 0.084(0.290)

.02 1.2088**(0.401)

.29 −2.27*

Left 0.134(0.479)

.02 −0.079(0.445)

−.02 0.33

Right-center −0.431(0.365)

−.07 −0.2926(0.405)

−.07 −0.25

Constant 3.849 −1.555Pearson χ2 380.26 288.51d.f. 373 373aThe source for union membership data is Haberfeld (1995).bResults of tests of differences between parameters are shown.cThe odds ratio is a measure of association which “approximates how much more likely (or unlikely) it is for the outcome to be

present among those with x = 1 than among those with x = 0′′ (Hosmer and Lemeshow, 1989:41).*p < .05.**p < .01.

First, whereas the collective voice explanation (operationalized interms of the pay dissatisfaction item capturing perceived equity of pay)was not a significant determinant of GFL membership in 1982, in 1996,as predicted, it was (� = –0.57, p < 0.05; tdiff = 1.75, p < 0.05). It appearsthat, unlike in 1982, workers who are dissatisfied with their pay tend toseek or retain GFL membership, with the effect of perceived pay equityon membership being –0.14. Nevertheless, no change was found withregard to the strength of the instrumentality explanation. As in 1982, payin 1996 remained negatively related to the (unobserved) probability ofbeing a GFL member, and there was no significant difference in the rela-tive strength of the � values for the two years (tdiff = 0.40). That is, as in1982, it appears that Israeli workers receiving lower pay still had a greaterneed for the various services still offered by the GFL.

As predicted, the shift in the industrial relations regime and the changesin the GFL itself were associated with a substantial shift in the role ofconsumerism as an explanation of union membership. Whereas Haberfeld(1995) interpreted his 1982 results as suggesting strong support for theconsumerism explanation, the 1996 data indicate that consumerism nolonger explains union membership in Israel. Specifically, geographiclocation, a primary correlate of union status in 1982, fails to achievesignificance as a determinant of union membership in 1996 (tdiff = –2.15,p < 0.05). This is most likely a consequence of (1) the GFL’s decision tospin off its network of hospitals and clinics, many of which were the soleproviders of health care in the peripheral areas (Haberfeld, 1995), and thesubsequent entry of other health maintenance organizations into thesesame areas and (2) the privatization of nearly all the GFL-owned enter-prises, most of which were, in effect, “closed shops” (Shalev, 1992) andmany of which were located in Israel’s periphery.

Our bivariate data seem to indicate a rather unstable link between partypreference and union membership. The odds of preferring left to rightwere 30 percent higher for members than for nonmembers in 1982 butwere about 15 percent lower in 1996 (0.21 versus 0.16 in 1982 and 0.23versus 0.27 in 1996; see Table 2). Nevertheless, we were unable to detectany shift in the role played by political ideology in affecting the probabil-ity of union membership (neither party variable was significant in eitheryear). Apparently, Israeli workers continue to differentiate betweenwork-related issues and issues of national security. Nevertheless, a com-plex shift was detected with regard to those variables grouped under theunion social values explanation. As in 1982, workers who attached highimportance to job security were more likely than others to be GFL mem-bers in 1996. However, whereas this factor had only a moderate effect on


union membership (as evaluated at the sample mean of the membershipvariable) in 1982 (0.04), in 1996 this factor had a significantly greatereffect (effect = 0.25; tdiff = –3.16, p < 0.01) in 1996. Furthermore, whereassupport for socialist economic policies was not a significant determinantof union membership in 1982, in 1996 its effect was of a substantial mag-nitude (effect = 0.29; tdiff = –2.27, p < 0.05). Nevertheless, the resultsregarding a third indicator of union social values suggest more limitedsupport for our prediction that this explanation would increase in impor-tance as a result of the institutional shifts described earlier. Specifically,whereas in 1982 individuals expressing militant attitudes were signifi-cantly more likely than others to be GFL members (� = 0.69, p < 0.05), in1996 militancy was no longer a significant determinant of membership(tdiff = 1.56, p < 0.10). Our bivariate results (see Table 2) provide someinsight into this finding. These results indicate that militancy was no lessof an influence among members in 1996 than in 1982. However, since thepercentage of those nonmembers expressing militant attitudes rose from1982 to 1996, the impact of militancy on membership weakened. Supportalso was found for the bureaucratic pressure explanation. As predicted,the presence of an active workers’ committee became a significantlymore powerful determinant of union membership. Specifically, it appearsthat respondents employed in establishments where workers’ committeeswere active were even more likely than others to be GFL members in1996 (� = 1.89, p < 0.01) than in 1982 (� = 0.67, p < 0.05; tdiff = –2.30,p < 0.05). Whereas the magnitude of this effect was 0.11 in 1982, in 1996it was 0.46.

Finally, associated with the institutional shift may have been signifi-cant shifts in two of the demographic and work-related control vari-ables. Specifically, whereas in 1982 respondents with academic degreeswere no more likely than others to be GFL members, in 1996 this factoremerged as significantly and inversely related to union membership(� = –1.12, p < 0.05; tdiff = 1.91, p < 0.05). Similarly, whereas in 1982respondents working for organizations employing fewer than 100 work-ers were no more or less likely to be GFL members than those workingfor larger organizations, in 1996 organizational size was a significant,positive determinant of union membership (� = 0.85, p < 0.05; tdiff =–2.34, p < 0.05). This is most likely a function of the need for the GFLto more selectively invest its organizing resources. Whereas in 1982membership was not directly influenced by the allocation of resourcestoward organizing, by 1996 the Histradrut was forced to more carefullyassess the way it invested its more limited resources in general and itsorganizing budget in particular.


Discussion and Conclusion

The results presented herein suggest that the factors associated withworkers’ union membership decisions are sensitive to shifts in the institu-tional environment of unions, supporting Haberfeld’s (1995:669) conten-tion that “there is no reason to expect that explanations relevant in onecontext will be relevant in another.” Specifically, while our data do notallow us to conclusively attribute shifts in the determinants of unionmembership decisions to changes in the nature of the Israeli industrialrelations regime and its primary labor institution, our data strongly sug-gest that paralleling this process of institutional change were shifts in thefactors associated with union membership. Thus, over the 14-year periodexamined, we found that factors related to (1) the desire for a collectivevoice and (2) bureaucratic pressure had a significantly greater impact thanpreviously thought on the propensity of an individual to be a union mem-ber. While we can only speculate, it is likely that this shift may be associ-ated with Israel’s movement away from corporatism and centralizedbargaining. We also found that the consumerism explanation not only lostexplanatory power over this 14-year period but by 1996 was no longer asignificant determinant of Israeli workers’ decisions to join a union.Again, while we can only speculate, it is likely that this shift has much todo with changes in the primary labor institution such as the spinning offof the institution’s health and other insurance funds, as well as of its pre-dominantly rural-based enterprises. No shift in the relative importance ofthe instrumentality explanation was detected over the 14-year period.

Unfortunately our data do not allow us to identify the precise mecha-nism by which institutional change affects union membership characteris-tics. Three possibilities come to mind. The first is that the institutionalshifts noted earlier resulted in a parallel shift in the union-oriented disposi-tions of Israeli workers. A second possibility is that these shifts providedIsraeli workers greater latitude for union membership decisions. That is, in1982 union membership lacked a certain element of individual volition;one could predict satisfactorily who would and would not join by the indi-vidual’s economic “location” rather than by the worker’s individualattitudes, predisposition, and workplace concerns. By 1996, however,the institutional environment had shifted such that those differences inindividual union-oriented dispositions that may have already been salientin 1982 could now be acted on. Thus, for example, less ideologically com-mitted members may have left the GFL, leaving the more ideologicallycommitted members behind. Finally, the third possibility is a combinationof the first two, namely, that the institutional environment may have influ-enced union membership both by altering individuals’ union-oriented


dispositions and by controlling their ability to act on these dispositions.We encourage future research to look into this.

Furthermore, for a number of reasons, the results presented hereinshould be taken with some degree of caution. First, because our objectivewas to conduct a comparative analysis, we were limited to the measuresused by the Dachaf data collection firm in 1982 as presented by Haberfeld(1995). Consequently, Haberfeld’s (1995:665) cautionary notes regard-ing the construct validity of several variables and the nature of causalrelations (discussed earlier) are relevant in the current context as well.Second, we cannot be sure that variables included under specific explana-tory categories capture the entire domain of the given explanation. Forexample, it is likely that in addition to pay equity, other factors alsoreflect the desire for a collective voice.

Third, although our analyses included controls for the possible impactof demographic shifts on union membership characteristics, we cannotrule out the possibility that other social and economic changes may havebeen responsible for the shifts identified. Indeed, a large number of otherimportant changes in Israel’s political, economic, and cultural landscapealso occurred during the 14-year period under examination (e.g., signingof peace agreements, economic liberalization). Cohort effects, such as ashift in the characteristics [e.g., individualism versus collectivism(Herzog and Shapira, 1986)] of an older generation of Israelis who werein the labor force in 1982 but not in 1996 also may be responsible forsome of our findings. However, to the extent that these societal develop-ments had an impact on the factors associated with union membership, wecontend that these effects were primarily indirect and were mediatedby the profound shifts in the Israeli industrial relations regime and itsprimary labor institution, the GFL.

Finally, our data do not allow us to distinguish between two key ele-ments of union membership decisions, namely, the decision to join andthe decision to retain membership. Consequently, we are unable to con-clude that the determinants associated with current membership trulyreflect the reasons why workers joined. They may, in fact, reflect only thereasons why individuals retained their membership.

Despite these limitations, if, as Haberfeld (1995:669) suggests, theIsraeli industrial relations context of 1982 parallels that of several Euro-pean nations in the 1990s, our findings with regard to the relative elastic-ity of union membership determinants may be of particular interest toEuropean industrial relations researchers and practitioners. Clearly, moreresearch is needed to determine the extent to which movements awayfrom extensive coverage, centralized bargaining, and corporatism will be


associated with the kinds of shifts in union membership decisionsdescribed herein. Nevertheless, our findings suggest that such a line ofresearch may indeed shed some important light on the dynamics of a basicprinciple in industrial relations theory, namely, that shifts in the environ-ments of unions affect the propensity of workers to join and retain theirmembership in labor organizations.

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Institutional Change and Union Membership: A Longitudinal Analysis of Union Membership Determinants in Israel