The impact of union activities and employee terminations on labor lawsuits in Brazil
DOI:
https://doi.org/10.1590/1980-53575526lafKeywords:
Unions, Dismissal, Propensity to labor lawsuit, Logistic regressionAbstract
This study explores the influence of unions on labor lawsuits, and the impacts of involuntary dismissal vis-à-vis self dismissal. We analyzed a database containing more than 18,000 observations from a financial institution in Brazil. Logistic regression models were then estimated using this data. The modeling was done using instrumental variables to address the endogeneity of unionization and the type of termination. Additionally, we present the models after performing matching to reduce potential selection bias in the sample. Control variables related to worker’s personal information were included. Results show significant increases in the probability of filing lawsuits if the employee is unionized and is involuntarily dismissed. Finally, all control variables, except gender, are positively associated with a higher propensity to file a lawsuit. The results were satisfactory in terms of model fit, with accurate classification percentages greater than 73% (up to 75.1%) and ROC curve values ranging from 77.1% to 79.3%.
Downloads
References
Arbache, Jorge S. 2008. “Unions and the labor market in Brazil.” In Almeida, Jorge (ed.). Brazil in Focus: Economic, Political and Social Issues. pp. 123-54. New York: Nova Publishers, Inc.
Baker, Dean; Glyn, Andrew; Howell, David R. and Schmitt, John. 2005. “Labor market institutions and unemployment: a critical assessment of the cross-country evidence.” In Howell, David R. (ed.). Fighting unemployment: the limits of free market orthodoxy. Oxford: Oxford University Press.
Besley, Timothy and Burgress, Robin. 2004. “Can labour regulation hinder economic performance? Evidence from India”. Quarterly Journal of Economics, vol. 199, 91–134.
Borjas, George J. 1996. Labor Economics. The McGraw-Hill Companies, Inc.
Botero, J. C., Djankov, S., Porta, R. L., Lopez-de-Silanes, F. and Shleifer, A. 2004. “The regulation of labor.” The Quarterly Journal of Economics 119(4), 1339-1382.
Bronars, Stephen G., and Deerw, Donald R. 1991. “The threat of unionization, the use of debt, and the preservation of shareholder wealth.” The Quarterly Journal of Economics 106 (1):231–54.
Campos, André G., and Moura, Ana C. 2017. “Union-nonunion wage gap: some unexpected findings in Brazilian labour market.” Repositório do Conhecimento do IPEA (Instituto de Pesquisa Econômica Aplicada): Discussion Paper 225. Available at: http://repositorio.ipea.gov.br/handle/11058/8046 (accessed on Oct. 09, 2023).
Card, David. 1996. “The Effect of Unions on the Structure of Wages: a longitudinal analysis”. Econometrica vol. 64, no. 4 (July), pp. 957-979.
Chen, Huafeng; Kacperczyk, Marcin and Ortiz-Molina, Hernan. 2011. “Labor unions, operating flexibility, and the cost of equity”. Journal of Financial and Quantitative Analysis 46 (1):25–58.
Chung, Richard; Lee, Bryan Byung-Hee; Lee, Woo-Jong and Sohn, Byungcherl C. 2015. “Do managers withhold good news from labor unions?” Management Science 62 (1):46–68.
Conover, William J. 1999. Practical Nonparametric Statistics. 3rd ed. New York: John Wiley and Sons.
Conselho Nacional de Justiça (CNJ). 2018. Justiça em Números. Brasília: CNJ. Disponível em: https://www.cnj.jus.br/pesquisas-judiciarias/justica-em-numeros/ (acessado em 14 de junho de 2021).
Conselho Nacional de Justiça (CNJ).2024. Justiça em Números. Brasília: CNJ. Disponível em: https://www.cnj.jus.br/wp-content/uploads/2024/05/justica-em-numeros-2024.pdf (acessado em 16 de junho de 2024).
Farber, Henry S. 1986. “The Analysis of Union Behavior” In Ashenfelter, O. & Layand, R. (editors). Handbook of Labor Economics, Vol. 2. Amsterdam: North Holland, pp. 1039-1089.
Fraisse, Henri; Kramarz, Francis and Prost, Corinne. 2015. “Labor Disputes and Labor Flows.” Industrial and Labor Relations Review 68 (5): 1043-1077.
Freeman, Richard B. 1980. “Unionism and the Dispersion of Wages.” Industrial and Labor Relations Review v. 34, n. 1, pp. 3-23.
Freeman, Richard B. 1981. “The effect of unionism on fringe benefits.” Industrial and Labor Relations Review v. 34, n. 4, pp. 489-509.
Freeman, Richard B., and Medoff, James L. 1984. “What do unions do.” Industrial and Labor Relations Review v. 38, pp. 244.
Heckman, James J. 1979. “Sample Selection Bias as a Specification Error.” Econometrica 47(1), pp. 153-161.
Heckman, James J.; Ichimura, Hidehilko and Todd, Petra. 1998. “Matching as an Econometric Evaluation Estimator.” Review of Economic Studies 65(2), pp. 261-294.
Hilary, Gilles 2006. “Organized labor and information asymmetry in the financial markets.” Review of Accounting Studies 11 (4):525– 48.
Hirschman, Albert O. 1970. Exit, voice, and loyalty: Responses to decline in firms, organizations, and states.
Harvard University Press.
Hosmer, David W. and Lemeshow, Stanley. 2000. Applied Logistic Regression. 2nd ed. New York: Wiley.
Howell, David; Baker, Dean; Glyn, Andrew and Schmitt, John. 2007. “Are protective labor market institutions at the root of unemployment? A critical review of the evidence”. Capitalism and Society vol. 2, 1–71.
Hoyman, Michele M.; Stallworth, Lamont E. 1981. “Who files suits and why: An empirical portrait of the litigious worker.” University of Illinois Law Review, p. 115.
Hoyman, Michele M. and Stallworth, Lamont E. 1986. “Suit Filing by Women: An Empirical Analysis.”Notre Dame Law Review v. 62, p. 61.
Lopez, Luiz R. 1991. História do Brasil Contemporâneo. 6ª ed., Porto Alegre: Mercado Aberto.
Matsa, David A. 2010. “Capital structure as a strategic variable: Evidence from collective bargaining.” The Journal of Finance 65 (3):1197–232.
McFadden, Daniel. 1974. “The measurement of urban travel demand”. Journal of Public Economics v. 3, pp. 303-328.
Menezes-Filho, Naercio and Eduardo A. S. Rodrigues. 2009. “Salário-mínimo e desigualdade no Brasil entre 1981-1999: uma abordagem semiparamétrica”. Revista Brasileira de Economia v. 63, n. 3, p. 277-298.
Oliveira, José G.C. and Andrade, Fábio W.M. 2002. “Comparação entre Medidas de Performance de Modelos de Credit Scoring”. Revista Tecnologia de Crédito. São Paulo: Ed. 33.
Pastore, José. 2007. Trabalhar custa caro. São Paulo: Editora LTr.
Ponczek, Vladimir and Ulyssea, Gabriel. 2002. “Enforcement of Labour Regulation and the Labour Market
Effects of Trade: Evidence from Brazil”. The Economic Journal Volume 132, Issue 641, January 2022, 361–390.
Rodrigues, Iram J. 2015. “Trabalhadores e sindicalismo no brasil: para onde foram os sindicatos?”. Caderno CRH v. 28, n. 75, p. 479–491.
Rubery, Jill. 2011. “Towards a gendering of the labour market debate”. Cambridge Journal of Economics vol. 35, 1103–26.
Sadek, Maria Teresa. 2018. Aspectos do contencioso jurídico de empresas no Brasil em contraste com a Argentina e o Chile. Coleção Biblioteca de Direito e Economia, Vol. 8. São Paulo: CEDES Centro de Estudos de Direito Econômico e Social.
Sakar, Prabirjit. 2013. “Does an employment protection law lead to unemployment? A panel data analysis of OECD countries, 1990–2008”. Cambridge Journal of Economics 37, 1335–1348.
Salama, Bruno; Carlotti, Danilo and Yeung, Luciana. 2018. “As decisões da Justiça Trabalhista são imprevisíveis?” Série: O Judiciário destrinchado pelo ‘Big Data’. Insper. Disponível em: https://www.insper.edu.br/wp-content/uploads/2018/09/Decisoes-Justica-Trabalhista-Serie-Judiciario-Big-Data.pdf (acessado em 22 setembro de 2018)
Shuntian, Yao and Chew, Soon B. 2014. “A mathematical model of a macro-focused labor union”. The Singapore Economic Review 59 (4), pp. 1-10.
Stuart, Elizabeth A. 2010. “Matching methods for causal inference: A review and a look forward”. Statistical
Science: A Review Journal of the Institute of Mathematical Statistics 25(1), pp.1–21.
Sun Choi, Chil; Sohn, Pando and Seo, Ji-Yong. 2016. “Relationship between leverage and the bargaining power of labor unions: evidence from theoretical and empirical perspectives”. Estudios de Economía 43 (1): 53-59
Tong, Zhenxu. 2015. “Labor unions and forms of corporate liquidity”. Journal of Business Finance and Accounting 42 (7–8):1007–39.
Van Rij, Coen and Daalder, Annelies. 1997. The business cycle theory and individual unionization decisions: A comparison of macro-and micro influences on union membership. Ashgate: Aldershot.
Weil, David. 2004 “Individual Rights and Collective Agents – The Role of Old and New Workplace Institutions in the Regulation of Labor Markets”. In FREEMAN, Richard B.; Joni Hersch and Mishel, Lawrence (editors). Emerging Labor Institutions for the Twenty-First Century. Chicago: University of Chicago Press.
Wooldridge, Jeffrey M. 2016. Introductory Econometrics: A Modern Approach. Cengage Learning, Boston, MA.
Yeung, Luciana, and Sergio P. Firpo. 2020. “Economic Analysis of Brazilian Labor Law”. In: Marciano A., Ramello G.B. (eds) Encyclopedia of Law and Economics (online). Springer, New York, NY. Available at: <https://doi.org/10.1007/978-1-4614-7883-6_694-2> (accessed on Oct. 09, 2023).
Websites
Pastore, José. Brasil: campeão de ações trabalhistas. Correio Brasiliense, 19 jun. 2017. Available at: <https://www.josepastore.com.br/artigos/rt/rt_389.htm>.(access on aug. 17, 2018)
TRADING ECONOMICS, 2024. Available at: https://tradingeconomics.com/country-list/unemployment-rate
(accessed on June 16, 2024).
UHY International (2016) How social security payments and other employer costs impact job creation and
wage growth in different economies. Available at: <http://www.uhy.com/wp-content/uploads/UHY-study-onemployment-taxes-Report.-2016-02-17.pdf> (accessed on Oct.08, 2023).
United States of America Government, Equal Employment Opportunity Commission. 2018. Available at: https://www.eeoc.gov/timelimitsfilingcharge#:~:text=In%20general%2C%20you%20need%20to,discrimination%20on%20the%20same%20basis. (accessed on June 22, 2024).
Published
Issue
Section
License
Copyright (c) 2025 Luciana Luk-Tai Yeung, Adriana Bruscato Bortoluzzo, Fabiana Rodrigues Alves
This work is licensed under a Creative Commons Attribution 4.0 International License.
By submitting an article, the author authorizes its publication and attests that it has not been submitted to any other journal. The original article is considered final. Articles selected for publication are proofread for grammatical and orthographic errors. The journal does not pay rights for published articles. The Institute of Economic Research from the School of Economics, Business and Accounting of the University of São Paulo (Instituto de Pesquisas Econômicas da Faculdade de Economia, Administração e Contabilidade da Universidade de São Paulo) owns the journal's copyright.
Atualizado em 14/08/2025