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Unions, Training, and Firm Performance: Evidence from the British Workplace Employee Relations Survey

Author

Listed:
  • Addison, John T.

    () (University of South Carolina)

  • Belfield, Clive R.

    () (Queens College, CUNY)

Abstract

This paper uses a combination of workplace and matched-employee workplace data from the British 1998 Workplace Employee Relations Survey to examine the impact of unions and firm-provided training (incidence, intensity/coverage, and duration) on establishment performance. The performance effects of training are indexed not just by individual and median establishment earnings but also by subjective measures of plant labor productivity and financial performance. Union effects on training are fairly subtle, and somewhat more positive when using individual rather than plant-wide training data. A positive impact of training on earnings is also detected in both individual and plant-based wage data, although consistent with much recent research the effects of union recognition are at best muted. There are also some signs of a positive interaction term for unionism and training in the earnings equations, but by the same token negative effects are encountered when training duration is expressed in categorical terms and interacted with union recognition. Instrumenting training yielded positive results for labor productivity and the firm’s bottom line. While some negative effects of multiple unionism at the workplace now emerge, they seemingly do not operate through the training route.

Suggested Citation

  • Addison, John T. & Belfield, Clive R., 2004. "Unions, Training, and Firm Performance: Evidence from the British Workplace Employee Relations Survey," IZA Discussion Papers 1264, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp1264
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    References listed on IDEAS

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    1. Wiji Arulampalam & Alison L. Booth & Mark L. Bryan, 2004. "Training in Europe," Journal of the European Economic Association, MIT Press, vol. 2(2-3), pages 346-360, 04/05.
    2. Alan Barrett & Philip J. O'Connell, 2001. "Does Training Generally Work? The Returns to in-Company Training," ILR Review, Cornell University, ILR School, vol. 54(3), pages 647-662, April.
    3. Dearden, Lorraine & Reed, Howard & Van Reenen, John, 2000. "Who Gains when Workers Train? Training and Corporate Productivity in a Panel of British Industries," CEPR Discussion Papers 2486, C.E.P.R. Discussion Papers.
    4. Daron Acemoglu & Jorn-Steffen Pischke, 1999. "The Structure of Wages and Investment in General Training," Journal of Political Economy, University of Chicago Press, vol. 107(3), pages 539-572, June.
    5. Francis Green & Stephen Machin & David Wilkinson, 1999. "Trade Unions and Training Practices in British Workplaces," ILR Review, Cornell University, ILR School, vol. 52(2), pages 179-195, January.
    6. Sandra E. Black & Lisa M. Lynch, 2001. "How To Compete: The Impact Of Workplace Practices And Information Technology On Productivity," The Review of Economics and Statistics, MIT Press, vol. 83(3), pages 434-445, August.
    7. Menezes-Filho, Naercio & Van Reenen, John, 2003. "Unions and Innovation: A Survey of the Theory and Empirical Evidence," CEPR Discussion Papers 3792, C.E.P.R. Discussion Papers.
    8. Black, Sandra E & Lynch, Lisa M, 1996. "Human-Capital Investments and Productivity," American Economic Review, American Economic Association, vol. 86(2), pages 263-267, May.
    9. Elchanan Cohn & John Addison, 1998. "The Economic Returns to Lifelong Learning in OECD Countries," Education Economics, Taylor & Francis Journals, vol. 6(3), pages 253-307.
    10. Zwick, Thomas, 2002. "Continuous Training and Firm Productivity in Germany," ZEW Discussion Papers 02-50, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    11. Harry J. Holzer & Richard N. Block & Marcus Cheatham & Jack H. Knott, 1993. "Are Training Subsidies for Firms Effective? The Michigan Experience," ILR Review, Cornell University, ILR School, vol. 46(4), pages 625-636, July.
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    Cited by:

    1. G. Guidetti & G. Pedrini, 2015. "Systemic flexibility and human capital development: the relationship between non-standard employment and workplace training," Working Papers wp1019, Dipartimento Scienze Economiche, Universita' di Bologna.
    2. Fabling, Richard & Grimes, Arthur, 2007. "HR Practices and Firm Performance: What Matters and Who Does It?," Occasional Papers 07/2, Ministry of Economic Development, New Zealand.
    3. Fabling, Richard, 2007. "Just How Innovative are New Zealand Firms? Quantifying & Relating Organisational and Marketing Innovation to Traditional Science & Technology Indicators," Occasional Papers 07/4, Ministry of Economic Development, New Zealand.
    4. Alex Bryson & John Forth & Simon Kirby, 2005. "High-Involvement Management Practices, Trade Union Representation And Workplace Performance In Britain," Scottish Journal of Political Economy, Scottish Economic Society, vol. 52(3), pages 451-491, July.

    More about this item

    Keywords

    earnings; intensity/coverage and duration; training incidence; employer-provided training; bargaining structure; union recognition; labor productivity; financial performance;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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