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Investment and Union Certification
Bruce C. Fallick and Kevin A. Hassett
Journal of Labor Economics
Vol. 17, No. 3 (July 1999), pp. 570-582
Published by: The University of Chicago Press on behalf of the Society of Labor Economists and the NORC at the University of Chicago
Stable URL: http://www.jstor.org/stable/10.1086/209931
Page Count: 13
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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 in the year following the election. We find that a winning certification election has, on average, about the same effect on investment in the year following the event as would—given the elasticity measures taken from the public finance literature—a 33 percentage‐point increase in the corporate tax. The magnitude of the response in years further away from the election is less certain.
© 1999 by The University of Chicago. All rights reserved.