markets for pollution control when firms are noncompliant the problem of noncompliance and enforcement in transferable discharge permit tdp markets has not received much attention this paper examines the consequences of noncompliance for a tdp market given fairly general assumptions about the characteristics of the enforcement policy in place the analysis reveals that when firms are noncompliant tdp markets retain their efficiency property only under some fairly stringent conditions the effect of noncompliance on the equilibrium permit price raises some important questions about the ability of a tdp market to achieve and remain in equilibrium when firms are noncompliant

individual transferable quota markets under illegal fishing the use of individual transferable quotas in fisheries has been considered an opportunity to achieve a given total allowable catch with a maximum social benefit one of the assumptions used in obtaining that result is that the system is in perfect compliance the presence of violations and the need for enforcement of tradable property rights systems in fisheries has not received much attention in the literature the incidents of non compliance however may affect the performance of transferable property rights based fisheries in unexplored ways in this paper we adapt previous literature on enforcing emissions trading programs to analyze a positive model of fisherman behavior that operates under a perfectly competitive individual transferable quota system while recognizing the opportunities for violations of quota holdings given incomplete enforcement considering a poorly enforced individual transferable quota system we are able to obtain a number of implications for the current and future equilibrium of the quota market the time paths of the fishery and the proper design of a policy rule on total allowable catch tac

the effect of unions on the structure of wages a longitudinal analysis this paper studies the effects of unions on the structure of wages using an estimation technique that explicitly accounts for misclassification errors in reported union status and potential correlations between union status and unobserved productivity the econometric model is estimated separately for five skill groups using a large panel data set formed from the u s current population survey the results suggest that unions raise wages more for workers with lower levels of observed skills in addition the patterns of selection bias differ by skill group among workers with lower levels of observed skill unionized workers are positively selected whereas union workers are negatively selected from among those with higher levels of observed skill despite a large and sophisticated literature there is still substantial disagreement over the extent to which differences in the structure of wages between union and nonunion workers represent an effect of trade unions rather than a consequence of the nonrandom selection of unionized workers over the past decade several alternative approaches have been developed to control for unobserved heterogeneity between union and nonunion workers 2 one method that has been successfully applied in other areas of applied microeconometrics is the use of longitudinal data to measure the wage gains or losses of workers who change union status unfortunately longitudinal estimators are highly sensitive to measurement error even a small fraction of misclassified union status changes can lead to significant biases if the true rate of mobility between union and nonunion jobs is low this sensitivity led lewis 1986 to essentially dismiss the longitudinal evidence in his landmark survey of union wage effects in this paper i present some new evidence on the union wage effect based on a longitudinal estimator that explicitly accounts for misclassification errors in reported union status the estimator uses external information on union status misclassification rates along with the reduced form coefficients from a multi variate regression of wages on the observed sequence of union status indicators to isolate the causal effect of unions from any selection biases introduced by a correlation between union status and the permanent component of unobserved wage heterogeneity recognizing that unions may raise wages more or less for

the effects of unions on investment and innovation evidence from wirs the above is representative of much popular discussion of the effects of unions on investment and innovation in the professional literature the view that unions deter investment by expropriating quasi rents is also commonplace see e g simons i944 baldwin i983 grout i984 in addition it is argued that union foisted restrictive work practices might make investment a more costly process see e g denny and nickell i989 in recent years the above theoretical notions have appeared to receive some empirical support in that in the united states the level of the investment capital ratio does appear to be lower in union firms see hirsch i988 and references therein in this paper we use information contained in the i 984 workplace industrial relations survey in order to investigate the actual impact of unions on investment the rest of the paper is organised as follows in section i i we informally review the alternative channels through which unions might affect investment section i 2 contains a simple theoretical model of investment which embodies all the alternative channels our results are to be found in section ii and finally some conclusions are contained in section iii

firm wage premia industrial relations and rent sharing in germany the authors use three distinct methods to investigate the influence of industrial relations on firm wage premia in germany first ordinary least squares ols regressions for the firm effects from

quota enforcement in resource industries self reporting and differentiated inspections quotas are frequently used in the management of renewable resources and emissions however in many industries there is concern about their basic effectiveness due to non compliance we develop an enforcement model of a quota regulated resource and focus on a situation with significant non compliance and exogenous constraints on fines and enforcement budget we propose a new enforcement system based on self reporting of excess extraction and explicit differentiation of inspection rates depending on compliance history we use differentiated inspections to induce firms to self report excess extraction this system increases the effectiveness of the quota by allowing the regulator to implement a wider range of aggregate extraction targets than under traditional enforcement while ensuring an efficient allocation of extraction in addition inspection costs can be reduced without reductions in welfare

wages profits and capital intensity evidence from matched worker firm data swedish data on workers matched with firms balance sheet reports are used to examine the relation between wages and firms ability to pay results indicate that experienced and highly educated workers are sorted into profitable firms wages are positively correlated with profits and the capital labor ratio after controlling for worker quality degree of effort supervision job characteristics local unemployment firms employment history and employer size lester s range of pay due to rent sharing is around 12 24 of the mean wage in sweden which is close to the estimates for the united states and united kingdom

do unions reduce investment evidence from canada the authors test for a link between unionization and net investment rates in canadian manufacturing analysis of data on 18 industries for the years 1967 87 reveals a negative non linear relationship the presence of unions appears to have reduced investment when the percentage of firms in the industry that were unionized was between 0 and approximately 50 with a plateau or slight positive marginal effect above this level in an industry moving from no unions to the mean level of unionization net investment and gross investment are predicted to fall by 66 74 and 18 25 respectively

technical efficiency unions and decentralized labor contracts abstract this paper explores the link between the presence of unions in the workplace the adoption of decentralized labor agreements and technical efficiency using a large sample of italian manufacturing firms we apply the data envelopment analysis and its robust version based on bootstrap theory to get reliable estimates of technical efficiency at the firm level in a standard first stage we devote particular attention to the specific technology adopted by distinguishing 20 different sector frontiers as well as to the presence of outliers the obtained efficiency scores are analyzed in a second stage applying a truncated regression model estimated via maximum likelihood following the simar and wilson 2007 2011 methodology our results highlight that the presence of workplace unionization decreases the level of technical efficiency while aspects limiting the unions power such as a strong exposure to international markets high debt levels or the prevalence of flexible assets partially reduce the negative effect however when firms adopt decentralized labor contracts agreements the effect on efficiency is positive and partially compensates the negative unions effect

the creation and capture of rents wages and innovation in a panel of u k companies this paper examines the impact of technological innovation on wages using a panel of british firms a head count measure of major innovations between 1945 and 1983 is combined with share price and accounting information innovating firms are found to have higher average wages but rival innovation tends to depress own wages this appears consistent with a model where wages are partly determined by a sharing in the rents generated by innovation in other words innovation may be a good instrument for proxies for rents such as profitability quasi rents or tobin s average q instrumental variable estimates of the elasticity between wages and quasi rents are about 0 29

wage compression within the firm evidence from an indexation scheme we revisit the role of labour market institutions by showing how they affect the sharing of firm specific rents between employers and employees we look at an italian wage indexation mechanism scala mobile that compressed the distribution of wages imposing real wage increases at the bottom of the distribution after developing a simplified version of a search model with intra firm bargaining and on the job search we document that skilled workers received lower wage adjustments when employed at firms with many unskilled workers and they tended to move towards more skill intensive firms moreover the system drove the least skill intensive firms out of the market

an integration of trade union models in a sequential bargaining framework this paper aims to embed two popular models of trade union behavior the monopoly model and the efficient bargaining model in a more general framework it does this by analyzing sequential bargaining models where wages are determined before employment and the power of the union in the two stages of the bargain differs as well as finding that the monopoly and efficient bargain models are special cases of this model a new class of models is also discovered this framework is used to analyze the relationship between union pow er and efficiency the empirical analysis of trade unions and the effects of trade union legislation copyright 1987 by royal economic society

itqs firm dynamics and wealth distribution does full tradability increase inequality concerns over the re distributive effects of individual transferable quotas itq s have led to restrictions on their tradability we consider a general equilibrium model with firm dynamics to evaluate the redistributive impact of changing the tradability of itqs a change in tradability would happen for example if permits are allowed to be traded as a separate asset from ownership of an active firm if the property right is associated with ownership of an active firm the permit can be leased in each period but it is not possible to exit the industry and keep the right however allowing the permits to be traded as a separate asset has two effects first it leads to a greater concentration of production in the industry second it directly converts a non tradable asset into a tradable one and this is equivalent to giving a lump sum transfer to all firms the first effect implies a concentration in revenues while the second implies a redistribution of wealth we calibrate our model to match the observed increase in revenue inequality in the northeast multispecies groundfish u s fishery we show that although observed revenue inequality measured by the gini coefficient increases by 12 wealth inequality is reduced by 40

rent sharing holdup and wages evidence from matched panel data rent sharing by workers can reduce the incentives for investment if some of the returns to sunk capital are captured in higher wages we propose a simple measure of this holdup effect based on the size of the wage offset for firm specific capital accumulation using social security earnings records for workers in the veneto region of italy linked to detailed financial data for their employers we find strong evidence of rent sharing with an elasticity of wages with respect to potential rents per worker of around 4 arising mainly at larger firms with higher price cost margins on the other hand we find little evidence that bargaining lowers the return on investment instead firm level bargaining appears to split the rents after deducting the full cost of capital

sunk investment bargaining and choice of capital structure this paper shows how a firm might optimally choose debt to affect the outcome of bilateral bargaining with workers or other input suppliers it is shown that debt may alleviate the well known underinvestment problem associated with the inability to write precommitment contracts also in such circumstances debt could be pareto improving over complete equity financing the relationship between the optimal level of debt and asset specificity of investment and bargaining power of the firm vis a vis the workers is explored the williamson conjecture that higher asset specificity will lead to less debt is shown not to be valid in general

the effect of unionization on productivity evidence from a long panel of coal mines the author measures the effect of unionization on productivity based on a panel of west virginia coal mines from 1897 to 1928 output and inputs are measured in physical terms and most of the mine

rent sharing and collective wage contracts evidence from german establishment level data using german establishment level data this article analyses whether wages respond to firm specific profitability conditions particular emphasis is given to the question of whether the extent of rent sharing varies with collective bargaining coverage in this context two conflicting hypotheses are tested the first one asserts that unions exploit their bargaining power at the firm level and appropriate a larger share of rents than the bargaining parties in uncovered firms the second one states that unions favour a compressed intra industry wage structure and suppress the responsiveness of wages to firm specific profitability conditions the empirical analysis provides strong support for the second hypothesis while pooled ordinary least squares pols estimates yield positive estimates of the rent sharing coefficient in covered establishments dynamic panel data estimates accounting for unobserved heterogeneity and the endogeneity of rents point to a rent sharing coefficient of zero

do works councils inhibit investment theoretische uberlegungen deuten darauf hin dass firmen durch arbeitnehmervertretungen auf betriebsebene wie gewerkschaften mit einem hold up problem konfrontiert werden da letztere sich einen teil der quasi renten aus langlebigen kapitalinvestitionen aneignen konnen deshalb mogen die firmen ihre anfalligkeit fur derartiges rent seeking dadurch verringern dass sie ihre investitionen zuruckfahren wahrend es fur diese hypothese empirische bestatigungen durch firmenstudien aus den usa gibt untersuchen wir ob dies auch in dem unterschiedlichen institutionellen umfeld in deutschland der fall ist wo statt betriebsgewerkschaften betriebsrate eine ahnliche rolle spielen konnen unter verwendung von parametrischen und nichtparametrischen methoden sowie von betriebspaneldaten finden wir keine empirischen hinweise darauf dass die errichtung bzw abschaffung eines betriebsrates einen negativen bzw positiven einfluss auf das betriebliche investitionsverhalten hat

wages profits and rent sharing the paper suggests a new test for rent sharing in the u s labor market using an unbalanced panel from the manufacturing sector it shows that a rise in a sector s profitability leads after some years to an increase in the long run level of wages in that sector the paper controls for workers characteristics for industry fixed effects and for unionism lester s range of wages is estimated for rent sharing reasons alone at approximately 24 per cent of the mean wage

rent sharing and wages evidence from company and establishment panels a central question in labor economics and macroeconomics is whether the textbook competitive model provides an adequate representation of the labor market using longitudinal data on companies and establishments this article suggests that it may not as predicted by rent sharing models of the labor market changes in profitability are shown to feed through into long run changes in wages these are not temporary wage effects and are not driven by the unionized workplaces in the data the article s estimates imply that for rent sharing reasons alone lester s range of wages is approximately 16

real wage determination and rent sharing in collective bargaining agreements the microeconomic forces that influence real wages are not fully understood this paper studies pay determination using data on approximately 600 labour contracts it finds that the real wage is an increasing function of past profitability in the employer s industry and a decreasing function of the level of unemployment in the employer s region these results are consistent with rent sharing theories

noncompliant firms in transferable discharge permit markets some extensions abstract this paper extends the results of previous research on transferable discharge permit tdp markets with noncompliant firms to make a specific comparison between standards and tdp systems when regulatory authorities are unable to achieve full compliance particular attention is given to the importance of the shape of the penalty function facing noncompliant firms the analysis indicates that under plausible penalty functions tdp markets may allow more pollution or a higher fraction of regulated firms out of compliance these results highlight the importance of implementation in the success of pollution control strategies relying on tdp markets

microdata evidence on rent sharing we examine the effect of firm profits on wages for individual workers while focusing on the empirical complications associated with estimating the extent of rent sharing controlling for worker and firm fixed effects and using several instruments to deal with the endogeneity of profits we report results indicating that ordinary least square ols estimates strongly underestimate the effects of profits on wages moreover the effect of profits on wages are estimated separately for firms with increasing and decreasing profits within a given time period we find a positive and stable effect only in firms with increasing profits this is in line with the idea that falling profits do not lead to wage cuts while increasing profits imply higher wages

long term relationships governed by short term contracts this paper studies the effects of contract duration on the incentive to invest in a relationship when its parties are rational and have perfect information and contracts are complete ex cept that short term contracts specify only current period actions t hen short term contracting distorts investment decisions only when t he efficient plan involves mainly sunk cost investment and the relati onship plays a consumption smoothing role there is a general but no t universal tendency to underinvest copyright 1988 by american economic association

rent sharing and collective bargaining coverage evidence from linked employer employee data using a linked employer employee data set this paper analyses the relationship between firm profitability and wages particular emphasis is given to the question of whether the sensitivity of wages to firm specific rents varies with collective bargaining coverage to address this issue we distinguish sector specific wage agreements firm specific wage agreements and wage determination without any bargaining coverage our findings indicate that individual wages are positively related to firm specific rents in the non union sector and under firm specific contracts industry wide wage contracts however seem to suppress firm level rent sharing while pooled ols estimates yield a positive correlation between wages and quasi rents under centralised contracts estimates accounting for unobserved individual and establishment heterogeneity point to a coefficient of zero differenced gmm estimates accounting for the endogeneity of our profitability measure even point to a negative relationship under centralised contracts

consumption network effects in this paper we study the relevance and mechanics of consumption network effects we use long panel data on the entire danish population to construct a measure of consumption based on administrative tax records and define the peer groups in terms of workplace occupation education and age we then apply an iv strategy and fixed effect models to recover the effects our instruments arise naturally from the network structure and firms shocks the estimated effects are statistically significant and relevant for policies as they generate non negligible multiplier effects further the results are consistent with a keeping up model

union rent seeking intangible capital and market value of the firm abstract this study considers the effect of unions on intangi ble capital investment and profitability within the context of a market value rather than a more traditional accounting based approach theory is provided suggesting unions are able to affect profitability by sharing in the economic returns to firm specific intangible capital in support of this hypothesis we find unionization reduces the returns to r d and produces a corresponding limiting influence on r d investment at the firm level i introduction a n extensive literature in economics has ex amined the determinants of profitability with much of the focus centering on the role of market structure only recently however have the effects of labor unions on profitability been analyzed ths is surprising since labor economists long have emphasized union influences on wages and productivity that in turn may affect profitabil ity in recent studies freeman 1983 and karier 1985 report a significant limiting influence of unions on price cost margins in high concentra tion manufacturing industries using firm level data and the market based tobin s

insurance within the firm we evaluate the allocation of risk between firms and their workers using matched employer employee panel data unlike previous contributions this paper focuses on idiosyncratic shocks to the firm which are the correct empirical counterpart of the theoretical notion of diversifiable risk we allow for both temporary and permanent shocks to output and find that firms absorb temporary fluctuations fully but insure workers against permanent shocks only partially risk sharing considerations can account for about 15 percent of overall earnings variability the remainder originating from idiosyncratic shocks to individual workers our welfare calculations indicate that firms are an important vehicle of insurance provision

insider forces and wage determination this paper investigates the relative importance of firm specific factors i e insider forces in wage determination using firm level data on 219 u k companies over 1974 82 it finds that a 1 percent rise in a firm s prices or productivity relative to the aggregate economy leads to a rise in relative wages of 0 1 0 2 percent as a corollary to this outside factors like the aggregate wage and the unemployment rate also play an important role there is evidence for insider based hysteresis effects but these are inversely related to the extent to which firms take national agreements into account copyright 1990 by royal economic society

bargaining power fear of disagreement and wage settlements theory and evidence from u s industry the paper develops and estimates a theoretical model of wage determination and union nonunion wage differentials in order to overcome the institutional ctiticisms of the formal bargaining literature the paper generalizes the nash zeuthen harsanyi model by linking the solution to the institutional concepts of bargaining power and fear or cost of disagreement and by making the outcome depend not only on endogenous but also on exogenous factors an operational specification of bargaining power and fear of disagreement allows the model to be estimated with data covering twelve companies and trade unions during the period from mid 1950 s to the late 1970 s while giving limited support to the nashzeuthen harsanyi solution the empirical analysis indicates that the bargaining outcome usually deviates from the nash zeuthen harsanyi point and in accordance with the institutionalist claim that it varies significantly with exogenous factors contrary to the traditional labor economics view the results do not support the general conclusion that the bargaining solution lies on the marginal revenue product curve of labor instead the relevant coefficients suggest that for many firms and unions the outcome might be better characterized by the efficient contract vertical contract curve

sunk capital unions and the hold up problem theory and evidence from cross country sectoral data abstract in this paper we study the hold up problem by considering the effect of union bargaining power on the level of investment per worker across sectors characterised by different levels of sunk capital investment we develop a search and matching model with heterogeneous sectors and ex post collective wage bargaining and test the predictions of the model using a difference in difference approach on manufacturing sector data in a set of oecd countries during the period 1980 2000 we find that union power reduces investment per worker particularly in sunk capital intensive industries we refine our empirical analysis showing that the underlying hold up problem is exacerbated when strikes are not regulated after a collective contract is signed and there is no arbitration while the presence of social pacts may sustain cooperative equilibria that alleviate the hold up problem our results are robust to a series of controls and possible endogeneity of union power

the determination of r d empirical evidence on the role of unions abstract this paper examines the empirical evidence of the role of union bargaining on innovation we review the existing empirical evidence and emphasis some of the problems with the theoretical assumptions we outline a simple model of strategic rd b the union bargains only over wages

labour markets and innovation ex post bargaining abstract there is considerable interest in how labour market conditions affect innovation lying behind much of the existing work on this question is a simple model of a single union bargaining with a single firm in which in the absence of binding contracts the union reduces the returns to innovation without bearing any of the costs this misses an important feature of some rd with efficient contracts there are cases where being faced with a stronger union will help a firm to win a patent race it would otherwise have lost

effects on welfare measures of alternative means of accounting for preference heterogeneity in recreational demand models multiattribute revealed preference data are used to investigate heterogeneity in a sample of kayakers for a panel of whitewater sites in ireland this article focuses on a comparison of preference heterogeneity using a random parameter logit model with correlated tastes and a latent class model in terms of the implications for welfare measures of environmental quality and site access changes recreationalists skill levels are found to affect preferences in both approaches statistics for the estimated distribution of welfare changes for the average respondent are computed for changes in site attributes but contrary to previous work these are found to be of similar magnitude

unionization incomplete contracting and capital investment this article examines empirically the hypothesis that incomplete contracts and resulting opportunistic behavior over the return to sunk assets reduces investment union firm contracts are incomplete because they 1 do not prevent all actions aimed at changing the existing contract 2 cover a relatively short time period and 3 do not extend to union members yet to be hired the primary response of firms is to reduce investment in specific durable assets and also to reduce employment growth and increase debt the authors find fairly strong evidence of these effects in a sample of large publicly traded firms using firm specific measures of unionization copyright 1993 by university of chicago press

who profits from patents rent sharing at innovative firms this article analyzes how patent induced shocks to labor productivity propagate into worker compensation using a new linkage of u s patent applications to u s business and worker tax records we infer the causal effects of patent allowances by comparing firms whose patent applications were initially allowed to those whose patent applications were initially rejected to identify patents that are ex ante valuable we extrapolate the excess stock return estimates of kogan et al 2017 to the full set of accepted and rejected patent applications based on predetermined firm and patent application characteristics an initial allowance of an ex ante valuable patent generates substantial increases in firm productivity and worker compensation by contrast initial allowances of lower ex ante value patents yield no detectable effects on firm outcomes patent allowances lead firms to increase employment but entry wages and workforce composition are insensitive to patent decisions on average workers capture roughly 30 cents of every dollar of patent induced surplus in higher earnings this share is roughly twice as high among workers present since the year of application these earnings effects are concentrated among men and workers in the top half of the earnings distribution and are paired with corresponding improvements in worker retention among these groups we interpret these earnings responses as reflecting the capture of economic rents by senior workers who are most costly for innovative firms to replace

does consumer demand reproduce inequality high income consumers vertical differentiation and the wage structure1 this article considers the effects on the wage structure of the u s economy s growing reliance on demand from high income consumers relative to the mass consumers that defined the post world war ii u s economy high income consumers are willing to pay for high quality and high status products these spending patterns split producers into up market and down market segments and stoke winner take all dynamics among up market producers economic dependence on high income consumers could thus lead to a new form of industrial segmentation based on vertical differentiation by product quality or status to test these predictions data from consumer expenditure and wage surveys are linked using input output tables and used to fit variance function regressions results show that industries more dependent on high income consumers have greater wage inequality this analysis identifies a new structural source of wage inequality not considered in previous research the increasingly unequal composition of consumer d

union effects on productivity profits and growth has the long run arrived this article interprets literature examining union effects on economic performance production function studies indicate small overall union impacts on productivity positive effects where they exist appear to result from management response to decreased profit expectations and from a natural selection process lower profitability among unionized firms is well established more interesting is the possibility that unions appropriate quasi rents deriving from long lived tangible and intangible capital the connection between unions investment behavior and productivity growth emerges as a particularly fruitful line of empirical inquiry although it does not encourage a sanguine view of unionism s long run impact

bargaining sorting and the gender wage gap quantifying the impact of firms on the relative pay of women there is growing evidence that rm specic pay premiums are an important source of wage inequality these premiums will contribute to the gender wage gap if women are less likely to work at high paying rms or if women negotiate worse wage bargains with their employers than men using longitudinal data on the hourly wages of portuguese workers matched with balance sheet information for rms we show that the wages of both men and women contain rm specic premiums that are strongly correlated with employer productivity we then show how the impact of these rm specic pay dierentials on the gender wage gap can be decomposed into a combination of bargaining and sorting eects consistent with the bargaining literature we nd that women receive only 90 of the rm specic pay premiums earned by men notably we obtain very similar estimates of the relative bargaining power ratio from our analysis of between rm wage premiums and from analyzing changes in

rent sharing before and after the wage bill many biases plague the analysis of whether employers share rents with their employees unlike what is predicted by the competitive labour market model using a portuguese matched employer employee panel this article is one of the first to address these biases in three complementary ways 1 controlling directly for the fact that firms that share more rents will ceteris paribus have lower net of wages profits 2 instrumenting profits via interactions between the exchange rate and the share of exports in firm s total sales 3 considering firm or firm worker spell fixed effects and highlighting the role of downward wage rigidity these approaches clarify conflicting findings in the literature and result in our preferred specifications in significant evidence of rent sharing a lester range of pay dispersion of 56 also shown to be robust to a number of competitive interpretations