Strikes and labor productivity: Application to the French case.

Summary The objective of this article is to provide an initial assessment of the effect of strike frequency on labor productivity in French firms, based on matched data from the REPONSE 2004-2005 survey and the Annual Enterprise Surveys. Anglo-Saxon studies present contradictory theoretical arguments on this issue and lead to contrasting empirical results. By controlling for unobserved heterogeneity bias, using a control function approach, we show that the frequency of strikes has a non-linear effect on labor productivity in French firms, which is positive and increasing up to a certain threshold, then neutral beyond. We then show that the effect of strikes on labor productivity varies significantly according to employee absenteeism in the firm. The incidence of strikes can positively and indirectly affect labor productivity, provided that they are not associated with an employee absenteeism problem. Conversely, when accompanied by this individual expression of conflict on the part of employees, strikes have no effect on labour productivity.