Collective Bargaining about Corporate Social Responsibility

Laszlo Goerke and Nora Paulus
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Nora Paulus: University of Luxembourg

No 202401, IAAEU Discussion Papers from Institute of Labour Law and Industrial Relations in the European Union (IAAEU)

Abstract: If a profit-maximising firm credibly commits to an employment-enhancing Corporate Social Responsibility (CSR) objective in negotiations with a trade union, the union can reduce its wage demands. Lower wages, ceteris paribus, raise profits, while the increase in employment enhances the payoff of a wage-setting trade union. Therefore, both the firm and the trade union can be better off in the presence of a collectively bargained CSR-objective than in its absence. Accordingly, establishing a CSR-objective can give rise to a Pareto-improvement and can mitigate the inefficiency resulting from collective wage negotiations.

Keywords: : Collective Bargaining; Corporate Social Responsibility; Employment; Pareto-Improvement; Trade Union; Wages (search for similar items in EconPapers)
JEL-codes: D60 J51 M14 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2024-03
New Economics Papers: this item is included in nep-eur, nep-gth and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Collective bargaining about corporate social responsibility (2024)
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