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Enterprise Bargaining and Productivity: Evidence from the Business Longitudinal Survey

Author

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  • Yi-Ping Tseng

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

  • Mark Wooden

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

Abstract

The 1990s has seen bargaining, and more specifically, enterprising bargaining supplant arbitration as the dominant industrial relations paradigm. In large part, this change reflects widespread belief that enterprise bargaining would stimulate greater levels of productivity. Evidence in support of this link between enterprise bargaining and productivity, however, is both scant and unconvincing. In this paper the relationship between enterprise bargaining and productivity is revisited using data from the Business Longitudinal Study. This data source is unique in that it provides firm-level data for Australia where the individual firms are tracked over a four-year period. Further, the survey period commenced in 1994-95, which is ideal for studying the impacts of the emerging growth in enterprise agreement coverage. Finally, the BLS data provide an objective measure of value added output. Estimation of a simple production function using a random effects model revealed evidence of a strong contemporaneous relationship between registered enterprise agreements and productivity. Indeed, firms where all employees are on such agreements are estimated to have productivity levels that are 8.8 per cent higher than comparable firms but where no employees are covered by an enterprise agreement and are forced instead to rely on conditions specified in an industry award. However, despite this finding, it still proved impossible to establish a direct causal relationship between the introduction of enterprise agreements and subsequent productivity growth.

Suggested Citation

  • Yi-Ping Tseng & Mark Wooden, 2001. "Enterprise Bargaining and Productivity: Evidence from the Business Longitudinal Survey," Melbourne Institute Working Paper Series wp2001n08, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    • Handle: RePEc:iae:iaewps:wp2001n08
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    File URL: http://melbourneinstitute.unimelb.edu.au/downloads/working_paper_series/wp2001n08.pdf
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    References listed on IDEAS

    as
    1. Malcolm Rimmer & Lee Watts, 1994. "Enterprise Bargaining: The Truth Revealed at Last," The Economic and Labour Relations Review, , vol. 5(1), pages 62-80, June.
    2. Iain Campbell & Peter Brosnan, 1999. "Labour Market Deregulation in Australia: The slow combustion approach to workplace change," International Review of Applied Economics, Taylor & Francis Journals, vol. 13(3), pages 353-394.
    3. Anne Hawke & Mark Wooden, 1998. "The Changing Face of Australian Industrial Relations: A Survey," The Economic Record, The Economic Society of Australia, vol. 74(224), pages 74-88, March.
    4. Andrea Bassanini & Stefano Scarpetta & Ignazio Visco, 2000. "Knowledge technology and economic growth: recent evidence from OECD countries," Working Paper Research 06, National Bank of Belgium.
    5. Anne Hawke, 2000. "The Business Longitudinal Survey," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 33(1), pages 94-99, March.
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    Cited by:

    1. Robert Breunig & Marn-Heong Wong, "undated". "Australia's firm-level productivity -- a new perspective," Australasian Stata Users' Group Meetings 2004 2, Stata Users Group.
    2. Joanne Loundes & Yi‐Ping Tseng & Mark Wooden, 2003. "Enterprise Bargaining and Productivity in Australia: What do We Know?," The Economic Record, The Economic Society of Australia, vol. 79(245), pages 245-258, June.
    3. John Revesz Ralph Lattimore, 2002. "Statistical analysis of the use and impact of government business programs," Others 0201003, University Library of Munich, Germany.
    4. Samantha Farmakis‐Gamboni & David Prentice, 2011. "When Does Reducing Union Bargaining Power Increase Productivity? Evidence from the Workplace Relations Act," The Economic Record, The Economic Society of Australia, vol. 87(279), pages 603-616, December.
    5. Elizabeth Webster & Yi‐Ping Tseng, 2002. "The Determinants of Relative Wage Change in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 35(1), pages 70-84, March.
    6. Samantha Farmakis-Gamboni & David Prentice, 2007. "Does Reducing Union Bargaining Power Increase Productivity?," Working Papers 2007.04 EDIRC Provider-In, School of Economics, La Trobe University.

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