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Enterprise agreements, labour productivity and wage earnings : an evaluation of the impact of enterprise agreements on Australian labour productivity and average wage earnings

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Farley, Martin John (2006) Enterprise agreements, labour productivity and wage earnings : an evaluation of the impact of enterprise agreements on Australian labour productivity and average wage earnings. Research Master thesis, University of Tasmania.

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Abstract

This thesis contains an evaluation of the impact of enterprise agreements on Australian
labour productivity and wage earnings between 1992 and 2003.
After almost a century of centralised industrial relations decision making, enterprise level
bargaining provided employers and employees with the opportunity to negotiate working
conditions and wages. The policy to introduce enterprise level bargaining was implemented
as part of extensive microeconomic reform designed to improve the international
competitiveness of the Australian economy. The industrial relations policy objective was to
improve productivity by increasing technical and allocative efficiency at the enterprise level.
The conclusions are that the introduction of enterprise agreements has contributed positively
and significantly to labour productivity and that wage earnings are positively and significantly
influenced by labour productivity. Both of these findings are significant. Australian labour
productivity had previously been primarily influenced by growth in output, while wage
earnings had been based on cost of living adjustments.
There is preliminary evidence to suggest that by internalising bargaining over wage and
conditions, enterprises have used the bargaining process to introduce significant change
and the agreement to formalise these changes.
The findings are based on a policy evaluation framework. This requires a comprehensive
approach and as such the following perspectives are included: • Policy evaluation;
• Organisational design, management and industrial relations theory and practice and their
convergence;
• Production theory and productivity measurement; and
• Wages and wage earnings models.
Econometric techniques are used to quantify the impact of introducing enterprise level
agreements. Generalised least squares and fixed effects modelling is applied to determine
the impact of introducing enterprise agreements on labour productivity and wage earnings
respectively. The analysis focuses on both the impact on the economy overall and within the
production/resources, margins and service sectors.
The enterprise agreement data set comprises Department of Employment and Workplace
Relations (DEWR) unpublished data relating to enterprise agreements registered in the
federal jurisdiction from 1992 to 2003. This is combined with ABS industry level data.
The impact of enterprise level agreements on productivity is modelled using an expanded
Cobb Douglas production function applied at the economy and sectoral levels.
The impact of decentralised agreements on wage earnings is modelled using empirical
approaches consistent with Reserve Bank of Australia and international studies.

Item Type: Thesis (Research Master)
Keywords: Collective bargaining, Productivity bargaining, Wages and labor productivity
Copyright Holders: The Author
Copyright Information:

Copyright 2006 the Author - The University is continuing to endeavour to trace the copyright
owner(s) and in the meantime this item has been reproduced here in good faith. We
would be pleased to hear from the copyright owner(s).

Additional Information:

Thesis (MEc)--University of Tasmania, 2007. Includes bibliographical references

Date Deposited: 09 Dec 2014 00:11
Last Modified: 16 Aug 2016 00:16
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