Does Industrial Relations Policy Affect Productivity?

Abstract

This article considers the link between productivity, fairness, and industrial relations (IR) policy at workplace, national, and international levels using data from micro- and macro-level empirical studies as well as data from the Australian Bureau of Statistics (ABS), the OECD, and other sources. There is some evidence that policies that enhance fairness enhance economic performance. But the effects are conditional; they are neither consistent nor universal Government policies to encourage or discourage unions, to restrict the extent or scope of collective bargaining or related action, or to encourage or discourage non-unionism or individual contracting, will not do a great deal in net terms to improve economic performance. However, in any specific workplace, industrial relations and the decisions management makes can have a notable effect on productivity. While welfare and industrial relations systems do not make a large inherent difference to economic efficiency, they make a very large difference to social outcomes.