Unions and Firms' Investments. A Unified View

Fabio Berton, Stefano Dughera and Andrea Ricci

No 168, LABORatorio R. Revelli Working Papers Series from LABORatorio R. Revelli, Centre for Employment Studies

Abstract: In this paper, we present a simple model in which a unionized and non-unionized firm optimally make investment decisions given their labor productivity. By allowing workers’ organizations to have positive effects on labor effort, we find that the classic hold-up problem does not necessarily survive. We also derive conditions under which rent-seeking by unions may actually encourage firms’ investments.

Keywords: Labor Unions; Rent seeking; Workers’ effort; Firms’ investments; Hold-up (search for similar items in EconPapers)
JEL-codes: J51 O31 O32 (search for similar items in EconPapers)
Date: 2019
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Working Paper: Unions and Firms' Investments: A Unified View (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:cca:wplabo:168

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