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Investment and Union Certification

Bruce Fallick () and Kevin Hassett ()

No 1996-43, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (US)

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 (search for similar items in EconPapers)
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http://www.federalreserve.gov/pubs/feds/1996/199643/199643pap.pdf (application/pdf)

Related works:
Journal Article: Investment and Union Certification (1999) Downloads
Working Paper: Investment and union certification (1996) Downloads
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