In a unionized labor market, a substitution of a payroll for an income tax will not alter employment if tax obligations are fulfilled. However, if workers or firms can evade taxes, this irrelevance result might no longer apply. This will especially be the case if the fine for tax evasion depends...

We examine the relation between labor union strength and investment efficiency using comprehensive firm-level data of Korean listed companies. We find that the perceived underinvestment related to unionization documented in previous studies is attributable to a negative relation between union...

The literature suggests that the presence of a labor union poses operational risk for firms by reducing operating flexibility. We posit that managers stockpile inventory in response to their heightened operational risk, such as potential strikes, so that managers maintain bargaining power in...

This paper offers a critical evaluation of the notion of collective voice, advanced by Freeman and Medoff (1984) in their pioneering contribution What Do Unions Do? It takes note of theoretical and empirical work supportive of/consistent with the collective voice/institutional response model,...

We study labor unions, an important stakeholder group that has not been a focus of the earnings smoothing literature. We posit that managers strike a balance between sheltering resources from employees’ profit sharing demands and catering to employees’ aversion to downside risk by smoothing...

Using representative data from the German Socio-Economic Panel (SOEP), this paper finds a statistically significant union wage premium in Germany of almost three percent which is not simply a collective bargaining premium. Given that the union membership fee is typically about one percent of...