Unionisation, Industrial Relations and Labour Productivity Growth in Australia: A Pooled Time-Series/Cross-Section Analysis of TFP Growth

A.J. Phipps and Jeffrey Sheen

No 190, Working Papers from University of Sydney, School of Economics

Abstract: This study examines the impact of unionisation and other industrial relations variables on total factor productivity (TFP) levels and growth in a conventional Cobb-Douglas production function. The estimation employs quarterly time-series data from 1976 to 1990 on output, employment and the capital stock for fifteen separate industries pooled with cross-sectional data on unionisation and other industrial relations characteristics derived from AWIRS. Preliminary results suggest that union density has a negative effect on the level of TFP while the number of awards had a negative effect over the sample period. However, union density has had a positive effect on TFP growth. Variables reflecting the proportion of workplaces having 'enlightened' industrial relations policies, such as profit sharing, worker share ownership and superannuation schemes appear to have been positively related to TFP levels and growth over the sample period. This evidence seems to suggest the existence of a collective 'voice' effect.

Date: 1993-09
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