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Worker Rights in Collective Bargaining

Author

Listed:
  • Benjamin W. Arold

    (University of Cambridge)

  • Elliott Ash

    (ETH Zurich)

  • W. Bentley MacLeod

    (Yale University)

  • Suresh Naidu

    (Columbia University)

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., Òworkers shall receive. . . Ó) and obligations (e.g., Òthe employer shall provide. . . Ó) from contract text, and validate our measures through evaluation of clause pairs and comparison to firm surveys on HR practices. Using timevarying 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," Cowles Foundation Discussion Papers 2468, Cowles Foundation for Research in Economics, Yale University.
    • Handle: RePEc:cwl:cwldpp:2468
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