Ruling Out Productivity?: Labor Contract Pages and Plant Performance (Classic Reprint)

Excerpt from Ruling Out Productivity?: Labor Contract Pages and Plant Performance

Despite a growing number of studies that document a significant positive relationship between union status and productivity,1 a number of criticisms remain unanswered. Among these complaints, one of the most frequently voiced by managers is that unionized establishments operate under more restrictive work rules and practices and that other potential gains of unionization, lower tur nover rates or formal grievance machinery, for example, could not outweigh the inefficiency associated with these added restrictions. Despite the frequency with which this complaint is raised, no direct empirical studies on the rela tionship between work rules and productivity have been made. The few studies that have been conducted, address this issue indirectly by focusing on differen ces in substitution parameters obtained from equivalent union and nonunion pro duction functions.2 This study takes a first step in analyzing the relationship between work rules and productivity in a more direct fashion.

In this study, monthly data from January 1976 to September 1982 on the operations of eleven paper mills are analyzed. The number of pages in collec tive bargaining agreements is taken as a directly measurable proxy for the number and complexity of work rules. This proxy for the extent of work rule regulation is then considered within the framework of a detailed, plant-level production function to gauge the differences in productivity associated with changes in the contract page measure.

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