A model of labour productivity and union density in British private sector unionised establishments

In this paper, a micro theoretic model of the simultaneous determination of labour productivity and union density is developed and estimated using British establishment-level data from the 1990 Workplace Employee Relations Survey. The main empirical finding is that higher union bargaining power does not necessarily lower labour productivity in union firms, ceteris paribus. Separate bargaining by multiple unions has a negative effect, but productivity is higher if management recommends union membership. There is also evidence that if unions can more effectively provide services to their members, and secure management support for union membership, union density may recover.