Working Paper
Investment and Union Certification
Abstract: A growing body of work--both theoretical and empirical--has emphasized that unionization may be better understood as a tax on capital rather than a tax on labor. Under this \"new\" view, unionization unambiguously lowers investment. Using data on union certification elections, we estimate the impact of unionization on firms' investment behavior. Employing both a standard q-model and an \"investment surprises\" technique, we find that union certification significantly reduces investment. We find that a winning certification election has, on average, about the same effect on investment as would a 30 percentage point increase in the corporate tax.
Keywords: Investment; union;
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File(s): File format is application/pdf http://www.federalreserve.gov/pubs/feds/1996/199643/199643pap.pdf
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Bibliographic Information
Provider: Board of Governors of the Federal Reserve System (U.S.)
Part of Series: Finance and Economics Discussion Series
Number: 1996-43
Pages: 22 pages