Trade Unionism and Enterprise Performance in Senegal

In line with efficiency wage theory, a high rate of trade unionism can be a source of higher production costs for enterprises, but also a source of enhanced efficiency. The aim of this study is to quantify the net effect of unionism on enterprise performance in Senegal. Based on data from the World Bank Enterprise Survey 2014, two models have been developed for the study: a labour productivity model and an average wage model based on the proportion of employees affiliated to a union. The study’s findings show a negative relationship between trade unionism and labour productivity (performance indicator) for large enterprises. Specifically, Senegalese enterprises which have trade unions perform poorly in terms of labour productivity. However, the study also finds that the existence of a union in an enterprise has a positive effect on employee remuneration: unionized workers have higher wages than non-unionized workers.