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Employment Relations Reforms and New Zealand’s ‘Productivity Paradox’

Author

Listed:
  • Erling Rasmussen

    (Auckland University of Technology)

  • Michael Fletcher

    (Victoria University of Wellington)

Abstract
In Australia, it has been debated whether the Fair Work Act (FWA) has a negative or positive impact on productivity growth. Likewise, in New Zealand, there has also been considerable interest and debate about that country’s so-called ‘productivity paradox’, though this has yet to be linked to employment relations legislation in recent debates. This is surprising since it has been an explicit aim to raise productivity growth of the two last employment relations reforms. This paper will focus on how employment relations has been supposed to impact on productivity growth during the Employment Contracts Act 1991 and the Employment Relations Act 2000 periods. It will discuss why employment relations reforms have yet to shift the productivity growth and explanations of the ‘productivity paradox’ so far. This includes how employer attitudes and behaviours may be part of the productivity ‘paradox’ as well as a brief overview of the research and approaches of the Productivity Commission. The paper suggests that, while employment relations can play a part in lifting productivity levels, what is crucial are contextual factors and how employment relations and other policies combine to reinforce each other.

Suggested Citation

  • Erling Rasmussen & Michael Fletcher, 2018. "Employment Relations Reforms and New Zealand’s ‘Productivity Paradox’," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 21(1), pages 75-92.
    • Handle: RePEc:ozl:journl:v:21:y:2018:i:1:p:75-92
    as

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    References listed on IDEAS

    as
    1. Bernd Brandl & Christian Lyhne Ibsen, 2017. "Instability and Change in Collective Bargaining: An Analysis of the Effects of Changing Institutional Structures," British Journal of Industrial Relations, London School of Economics, vol. 55(3), pages 527-550, September.
    2. Philippe Askenazy & Lutz Bellmann & Alex Bryson & Eva Moreno Galbis, 2016. "Productivity Puzzles Across Europe," PSE-Ecole d'économie de Paris (Postprint) halshs-01379283, HAL.
    3. Peetz, D, 2012. "Does Industrial Relations Policy Affect Productivity?," Australian Bulletin of Labour, National Institute of Labour Studies, vol. 38(4), pages 268-292.
    4. Dan Andrews & Chiara Criscuolo & Peter N. Gal, 2016. "The Best versus the Rest: The Global Productivity Slowdown, Divergence across Firms and the Role of Public Policy," OECD Productivity Working Papers 5, OECD Publishing.
    5. Askenazy, Philippe & Bellmann, Lutz & Bryson, Alex & Moreno Galbis, Eva (ed.), 2016. "Productivity Puzzles Across Europe," OUP Catalogue, Oxford University Press, number 9780198786160.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining
    • J8 - Labor and Demographic Economics - - Labor Standards

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