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What's your number? Interpreting the “fair and equitable” standard in seniority integration for airlines and other industries

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  • Lee, Darin
  • Singer, Ethan

Abstract

This paper develops an analytical framework for assessing the effects of workforce seniority integration resulting from a merger or consolidation of two firms, with a focus on the airline industry. In addition to developing the first formal model that can be used to analyze the relative equity effects of integrating two workforces following a merger, we demonstrate why the interpretations of the “fair and equitable” standard embedded in the two most commonly proposed methods of seniority integration used in the airline industry (the so-called “date-of-hire” and “ratio” methods) are in conflict, thereby necessitating binding third party arbitration. We also demonstrate that measures of aggregate equity distortion can often be reduced using a hybrid method that combines elements of both the date-of-hire and ratio methods.

Suggested Citation

  • Lee, Darin & Singer, Ethan, 2014. "What's your number? Interpreting the “fair and equitable” standard in seniority integration for airlines and other industries," Economics of Transportation, Elsevier, vol. 3(1), pages 2-15.
    • Handle: RePEc:eee:ecotra:v:3:y:2014:i:1:p:2-15
    DOI: 10.1016/j.ecotra.2013.12.002
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    References listed on IDEAS

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    1. Grossman, Gene M, 1983. "Union Wages, Temporary Layoffs, and Seniority," American Economic Review, American Economic Association, vol. 73(3), pages 277-290, June.
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    Cited by:

    1. Myongjin Kim & Qi Ge & Donggeun Kim, 2021. "Mergers and labor market outcomes in the US airline industry," Contemporary Economic Policy, Western Economic Association International, vol. 39(4), pages 849-866, October.

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