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Investment and Union Certification

Author

Listed:
  • Bruce Fallick
  • Kevin A. Hassett

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.

Suggested Citation

  • Bruce Fallick & Kevin A. Hassett, "undated". "Investment and Union Certification," Finance and Economics Discussion Series 1996-43, Board of Governors of the Federal Reserve System (U.S.), revised 10 Dec 2019.
    • Handle: RePEc:fip:fedgfe:1996-43
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    File URL: http://www.federalreserve.gov/pubs/feds/1996/199643/199643pap.pdf
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    References listed on IDEAS

    as
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    Keywords

    Investment; union;

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