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Investment and Union Certification

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  • Fallick, Bruce C
  • Hassett, Kevin A

Abstract

Using data on union certification elections, the authors estimate the impact of unionization on firms' investment behavior. Employing both a standard q model and an 'investment surprises' technique, they find that union certification significantly reduces investment in the year following the election. The authors find that a winning certification election has, on average, about the same effect on investment in the year following the event as would--given the elasticity measures taken from the public finance literature--a 33 percentage-point increase in the corporate tax. The magnitude of the response in years further away from the election is less certain. Copyright 1999 by University of Chicago Press.

Suggested Citation

  • Fallick, Bruce C & Hassett, Kevin A, 1999. "Investment and Union Certification," Journal of Labor Economics, University of Chicago Press, vol. 17(3), pages 570-582, July.
    • Handle: RePEc:ucp:jlabec:v:17:y:1999:i:3:p:570-82
    DOI: 10.1086/209931
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