Union Bargaining Power and the Amenity-Wage Tradeoff

Lorenzo Lagos

No 34186, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper studies how collective bargaining affects both wages and amenities. By merging collective bargaining agreements (CBAs) to linked employer-employee data in Brazil, I combine rich contracted amenities with wage information. I implement a difference-in-difference strategy that exploits a court ruling enforcing CBA continuation (i.e., ultractivity) to estimate the effects of union bargaining power. Strengthening unions raises wages and amenities without reducing employment—increasing retention despite some labor-labor substitution. A revealed preference approach shows that amenities account for 45% of total compensation gains. These findings suggest that collective bargaining can offset monopsony power, but employers retain the right-to-manage workforce composition.

JEL-codes: J32 J42 J52 K31 (search for similar items in EconPapers)
Date: 2025-08
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