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Worker Rights in Collective Bargaining

Author

Listed:
  • Benjamin W. Arold
  • Elliott Ash
  • W. Bentley MacLeod
  • Suresh Naidu

Abstract

Collective bargaining agreements (CBAs) specify the contractual rights of unionized workers, but their full legal content has not yet been analyzed by economists. This paper develops novel natural language methods to analyze the empirical determinants and economic value of these rights using a new collection of 30,000 CBAs from Canada in the period 1986-2015. We parse legally binding rights (e.g., "workers shall receive...") and obligations (e.g., "the employer shall provide. ..") from contract text, and validate our measures through evaluation of clause pairs and comparison to firm surveys on HR practices. Using time varying province-level variation in labor income tax rates, we find that higher taxes increase the share of worker-rights clauses while reducing pre-tax wages in unionized firms, consistent with a substitution effect away from taxed wages toward untaxed rights. Further, an exogenous increase in the value of outside options (from a leave-one-out instrument for labor demand) increases the share of worker rights clauses in CBAs. Combining the regression estimates, we infer that a one-standard-deviation increase in worker rights is valued at about 5.7% of wages.

Suggested Citation

  • Benjamin W. Arold & Elliott Ash & W. Bentley MacLeod & Suresh Naidu, 2025. "Worker Rights in Collective Bargaining," RFBerlin Discussion Paper Series 25113, Rockwool Foundation Berlin (RF Berlin).
    • Handle: RePEc:crm:wpaper:25113
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    Keywords

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    JEL classification:

    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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