Trade Unions and Productivity: The German Evidence
| Date | 01 March 1991 |
| Published date | 01 March 1991 |
| Author | Claus Schnabel |
| DOI | http://doi.org/10.1111/j.1467-8543.1991.tb00225.x |
British
Journal
of
Industrial
Relations
29:l
March
1991
0007-1080
$3.00
Trade Unions and Productivity:
The
German Evidence
Claus
Schnabel*
Final version received
17
September 1990.
Abstract
This paper provides
a
brief review of the empirical evidence
on
union
productivity effects in Germany. The influence of trade unions on produc-
tivity
is the net
effect
of conflicting forces which can lead
to
higher
or
lower
productivity. Although the German dual system of workers’ representation
via
unions and works councils is quite favourable to the existence
of
productivity-enhancing ‘voice’ effects, various empirical studies have not
been able to detect significant positive net effects of these institutions on
productivity.
1.
Introduction
After several decades
of
comparative neglect, the impact
of
trade unions on
productivity and economic performance is once again the subject of intense
controversy. The contemporary discussion has been initiated
by
a series
of
studies by Harvard economists, led by Freeman and Medoff (1979, 1984)
who
argued forcefully that trade unions raise productivity, even after
aiccounting for the predictable microeconomic responses
of
firms when
confronted with higher wages.
However, the generality of the thesis that unions raise productivity and
the robustness
of
the empirical studies have widely been questioned by, for
example, Hirsch and Addison (1986) for the USA, Metcalf (1990) and
Oulton (1990) for the UK, and Schnabel(1989a) for Germany.
For the Federal Republic of Germany, comprehensive studies along the
lhes of those in Britain and the USA do not yet exist. This research gap is
plrobably caused by the lack of suitable micro data and by the different
structure of collective bargaining and industrial relations
in
Germany, which
make it difficult to separate the influence
of
trade unions and other factors
‘Institut
der
deutschen Wirtschaft,
Cologne
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