American Economic Review· 2026Q1
Union Bargaining Power and the Amenity-Wage Trade-Off
- 2citations
- Q1SCImago
- 2026year
Short summary
Strengthening unions in Brazil increases wages and amenities by 45% of total compensation gains, without reducing employment, according to a difference-in-difference strategy using merged collective bargaining agreements and employer-employee data.
AI-generated from the title and abstract; the full text is not read.
Key points
- Union bargaining power increases both wages and amenities.
- Amenities constitute 45% of total compensation gains based on revealed preference.
- Employment levels are not reduced by stronger union bargaining power.
- Labor-labor substitution occurs, but overall retention increases.
AI-generated from the title and abstract; the full text is not read.
Abstract
This paper studies how collective bargaining affects both wages and amenities. By merging collective bargaining agreements (CBAs) to linked employer-employee data in Brazil, I combine rich contracted amenities with wage information. I implement a difference-in-difference strategy that exploits a court ruling enforcing CBA continuation (i.e., ultractivity) to estimate the effects of union bargaining power. Strengthening unions raises wages and amenities without reducing employment—increasing retention despite some labor-labor substitution. A revealed preference approach shows that amenities account for 45% of total compensation gains. These findings suggest that collective bargaining can offset monopsony power, but employers retain the right-to-manage workforce composition. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
The authors' abstract, as published at the source. American Economic Review, 2026 · DOI ↗
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Field: Public Administration
Public AdministrationSocial Sciences