TY - JOUR
T1 - Negotiating with labor under financial distress
AU - Benmelech, Efraim
AU - Bergman, Nittai K.
AU - Enriquez, Ricardo J.
N1 - Publisher Copyright:
© 2012 The Author.
PY - 2012/9/1
Y1 - 2012/9/1
N2 - We analyze how firms renegotiate labor contracts to extract concessions from labor. While anecdotal evidence suggests that firms tend to renegotiate wages downward in times of financial distress, there is no empirical evidence that documents such renegotiation, its determinants, and its magnitude. This article attempts to fill this gap. Using a unique data set of airlines, which includes detailed information on wages and pension plans, we document an empirical link between airline financial distress, pension underfunding, and wage concessions.
AB - We analyze how firms renegotiate labor contracts to extract concessions from labor. While anecdotal evidence suggests that firms tend to renegotiate wages downward in times of financial distress, there is no empirical evidence that documents such renegotiation, its determinants, and its magnitude. This article attempts to fill this gap. Using a unique data set of airlines, which includes detailed information on wages and pension plans, we document an empirical link between airline financial distress, pension underfunding, and wage concessions.
UR - http://www.scopus.com/inward/record.url?scp=84876301001&partnerID=8YFLogxK
U2 - 10.1093/rcfs/cfr001
DO - 10.1093/rcfs/cfr001
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AN - SCOPUS:84876301001
SN - 2046-9128
VL - 1
SP - 28
EP - 67
JO - Review of Corporate Finance Studies
JF - Review of Corporate Finance Studies
IS - 1
ER -
