Labor Policy and Investment
Policy debates over proposed legislative labor policy changes include contentions that business investment will negatively respond to labor laws that favor labor. Research on labor policy, however, often assumes that investment is fixed. We present a sequential bargaining model in which labor policies that increase labor's bargaining power and reduce management's options during strikes are predicted to reduce investment. Using provincial data on investment for 1967 to 1999, a strike replacement ban and protections for workers who refuse to handle struck work are estimated to reduce new investment, especially within the first few years after the policy change.
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9992, University of Oxford, Department of Economics.
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"The Effect Of Collective Bargaining Legislation On Strikes And Wages,"
The Review of Economics and Statistics,
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- Peter Cramton & Morley Gunderson & Joseph Tracy, 1999. "The Effect of Collective Bargaining Legislation on Strikes and Wages," Papers of Peter Cramton 99res, University of Maryland, Department of Economics - Peter Cramton, revised 30 Jul 1998.
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"Investment and union certification,"
Finance and Economics Discussion Series
96-43, Board of Governors of the Federal Reserve System (U.S.).
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"The effect of strike replacement legislation on employment,"
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- Cameron W. Odgers & Julian R. Betts, 1997. "Do unions reduce investment? Evidence from Canada," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 51(1), pages 18-36, October.
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