NILS Working paper no. 168. Enterprise bargaining and productivity

Abstract

There can be no certainty about the productivity effects of enterprise bargaining, because the counterfactual situation is and will remain unknown. That said, I contend that there are good grounds for doubting that enterprise bargaining contributed much, if anything, to productivity; still less to ongoing productivity growth. These grounds are: 1. At most, there was a four-year boost in productivity whose timing does conceivably match the introduction and spread of enterprise bargaining. The boost has not endured. 2. If the four-year boost was policy-induced, there were other changes of policy in the late 1980s and early 1990s that may have been more important than the shift to enterprise bargaining. 3. When the productivity data are dissected to the industry level, it is hard to identify any large movements in productivity that could reasonably be ascribed to enterprise bargaining. Wholesale trade is a possible exception. The records of some major industries, notably mining and electricity, gas and water, suggest that much stronger influences have been at work.