1

In this paper we review econometric efforts, aiming to identify whether employee participation add to productivity growth. Involvement programmes only initiated in order to improve productivity is well described in the literature, the interesting field however is the programmes having productivity improvements as one of several objectives; in particular financial participation and collective representation. All three types of involvement are reviewed in this paper. A major obstacle in all studies of this type is to identify clear cut and measurable explanatory variables and to control for selection and simultaneity bias. The overall picture is mixed and points to a combination of factors. Participation may lead to significant but not substantial higher productivity (although due to changes in relative pay offs, profitability may be unchanged). Furthermore, empirical work indicates that a combination of involvement, partaking in decisions and economic rewards are required for employee participation to significant influencing productivity. There are, however, still considerable challenges concerning methodology, which should be in the centre of future research