The Effect of Unions on Productivity in a Multinational Manufacturing Firm

Robert N. Mefford

ILR Review, 1986, vol. 40, issue 1, 105-114

Abstract: This paper examines the effect of unions on productivity in 31 plants of a large multinational firm in the years 1975–82. The plants, 60 percent of which are unionized, all produce a similar line of products using material-intensive, labor-intensive, low-technology methods. Results obtained by estimating a translog production function indicate that unionization's overall effect on productivity is positive. Specific findings are that unionization increases the capital-labor ratio and improves management performance, but it also raises the absenteeism rate. A net positive effect on productivity remains even when these channels of union influence are controlled for, a result that, the author suggests, may reflect an improved labor relations climate or improved labor quality associated with unionization.

Date: 1986
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Persistent link: https://EconPapers.repec.org/RePEc:sae:ilrrev:v:40:y:1986:i:1:p:105-114

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