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The Value of Worker Rights in Collective Bargaining

Author

Listed:
  • Benjamin W. Arold
  • Elliott Ash
  • W. Bentley MacLeod
  • Suresh Naidu

Abstract

This paper proposes novel natural language methods to measure worker rights from collective bargaining agreements (CBAs) for use in empirical economic analysis. Applying unsupervised text-as-data algorithms to a new collection of 30,000 CBAs from Canada in the period 1986-2015, we parse legal obligations (e.g., “the employer shall provide...”) and legal rights (e.g., “workers shall receive...”) from the contract text. We validate that contract clauses provide worker rights, which include both amenities and control over the work environment. Companies that provide more worker rights score highly on a survey indicating pro-worker management practices. Using time-varying province-level variation in labor income tax rates, we find that higher taxes increase the share of worker-rights clauses while reducing pre-tax wages in unionized firms, consistent with a substitution effect away from taxed compensation (wages) toward untaxed amenities (worker rights). Further, an exogenous increase in the value of outside options (from a leave-one-out instrument for labor demand) increases the share of worker rights clauses in CBAs. Combining the regression estimates, we infer that a one-standard-deviation increase in worker rights is valued at about 5.7% of wages.

Suggested Citation

  • Benjamin W. Arold & Elliott Ash & W. Bentley MacLeod & Suresh Naidu, 2025. "The Value of Worker Rights in Collective Bargaining," CESifo Working Paper Series 11766, CESifo.
  • Handle: RePEc:ces:ceswps:_11766
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    File URL: https://www.cesifo.org/DocDL/cesifo1_wp11766.pdf
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    More about this item

    Keywords

    worker rights; collective bargaining; natural language processing; employment.;
    All these keywords.

    JEL classification:

    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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