Trade Unions and Productivity: Theory and Evidence

This article has four parts. First, we outline the main determinants of productivity and examine some evidence on the relative importance of the factors involved. Secondly, we outline the “conventional” wisdom on the influence of trade unions and generate several hypotheses on the possible effects of trade unions on a number of economic variables. Thirdly, by an appeal to a wide range of literature, we seek to test these hypotheses but with particular reference to the influence of trade unions on productivity. Fourthly, we indicate that in terms of policy on productivity‐raising measures the conventional wisdom is wanting and there is a need for an alternative theory upon which to base policies for the implementation of change.