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Investment and Union Certification

Listed author(s):
  • Fallick, Bruce C
  • Hassett, Kevin A

Using data on union certification elections, the authors estimate the impact of unionization on firms' investment behavior. Employing both a standard q model and an 'investment surprises' technique, they find that union certification significantly reduces investment in the year following the election. The authors find that a winning certification election has, on average, about the same effect on investment in the year following the event as would--given the elasticity measures taken from the public finance literature--a 33 percentage-point increase in the corporate tax. The magnitude of the response in years further away from the election is less certain. Copyright 1999 by University of Chicago Press.

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File URL: http://dx.doi.org/10.1086/209931
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Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 17 (1999)
Issue (Month): 3 (July)
Pages: 570-582

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Handle: RePEc:ucp:jlabec:v:17:y:1999:i:3:p:570-82
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  1. Connolly, Robert A & Hirsch, Barry T & Hirschey, Mark, 1986. "Union Rent Seeking, Intangible Capital, and Market Value of the Firm," The Review of Economics and Statistics, MIT Press, vol. 68(4), pages 567-577, November.
  2. Machin, Stephen J & Wadhwani, Sushil, 1991. "The Effects of Unions on Organisational Change and Employment," Economic Journal, Royal Economic Society, vol. 101(407), pages 835-854, July.
  3. Voos, Paula B & Mishel, Lawrence R, 1986. "The Union Impact on Profits in the Supermarket Industry," The Review of Economics and Statistics, MIT Press, vol. 68(3), pages 513-517, August.
  4. Voos, Paula B & Mishel, Lawrence R, 1986. "The Union Impact on Profits: Evidence from Industry Price-Cost Margin Data," Journal of Labor Economics, University of Chicago Press, vol. 4(1), pages 105-133, January.
  5. Harry G. Johnson & Peter Mieszkowski, 1970. "The Effects of Unionization on the Distribution of Income: A General Equilibrium Approach," The Quarterly Journal of Economics, Oxford University Press, vol. 84(4), pages 539-561.
  6. Jason G. Cummins & Kevin A. Hassett & R. Glenn Hubbard, 1994. "A Reconsideration of Investment Behavior Using Tax Reforms as Natural Experiments," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(2), pages 1-74.
  7. Fallick, Bruce C & Hassett, Kevin A, 1996. "Unionization and Acquisitions," The Journal of Business, University of Chicago Press, vol. 69(1), pages 51-73, January.
  8. Rose, Nancy L, 1987. "Labor Rent Sharing and Regulation: Evidence from the Trucking Industry," Journal of Political Economy, University of Chicago Press, vol. 95(6), pages 1146-1178, December.
  9. Bronars, Stephen G & Deere, Donald R, 1993. "Union Organizing Activity, Firm Growth, and the Business Cycle," American Economic Review, American Economic Association, vol. 83(1), pages 203-220, March.
  10. Denny, Kevin & Nickell, Stephen J, 1992. "Unions and Investment in British Industry," Economic Journal, Royal Economic Society, vol. 102(413), pages 874-887, July.
  11. Barry T. Hirsch & Robert A. Connolly, 1987. "Do Unions Capture Monopoly Profits?," ILR Review, Cornell University, ILR School, vol. 41(1), pages 118-136, October.
  12. Addison, John T & Hirsch, Barry T, 1989. "Union Effects on Productivity, Profits, and Growth: Has the Long Run Arrived?," Journal of Labor Economics, University of Chicago Press, vol. 7(1), pages 72-105, January.
  13. Michael A. Salinger, 1984. "Tobin's q, Unionization, and the Concentration-Profits Relationship," RAND Journal of Economics, The RAND Corporation, vol. 15(2), pages 159-170, Summer.
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