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Title: Collective Bargaining and the Division of the Value of the Enterprise
Authors: Abowd, John
Keywords: wage settlements
quasi-rent splitting
efficient contracting
unions and profits
Issue Date: 1-Jan-1987
Citation: National Bureau of Economic Research Working Paper 2137, January 1987
Series/Report no.: Working Papers (Princeton University. Industrial Relations Section) ; 218
Abstract: The enterprise (firm) is modeled as a collection of formal and informal contracts providing various factors of production with claims on the income stream in consideration of assets or services supplied to the enterprise. The strongly efficient bargaining model implies that the division of the quasi-rents will result in dollar for dollar exchanges of wealth between the union members and the shareholders. The leading inefficient bargaining models do not imply such tradeoffs in general. The model is tested by considering contract settlements during the years 1976 to 1982 as recorded by the Bureau of National Affairs in Collective Bargaining Negotiations and Contracts. Security price data for the firms were merged with these bargaining unit level settlement data. The tests provide substantial confirmation of the dollar for dollar wealth tradeoff between union members and shareholders.
Appears in Collections:IRS Working Papers

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