Negotiating with labor under financial distress

Efraim Benmelech; Nittai K. Bergman; Ricardo J. Enriquez

doi:https://doi.org/10.1093/rcfs/cfr001

Negotiating with labor under financial distress

Efraim Benmelech, Nittai K. Bergman, Ricardo J. Enriquez

Research output: Contribution to journal › Article › peer-review

Abstract

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.

Original language	English
Pages (from-to)	28-67
Number of pages	40
Journal	Review of Corporate Finance Studies
Volume	1
Issue number	1
DOIs	https://doi.org/10.1093/rcfs/cfr001
State	Published - 1 Sep 2012
Externally published	Yes

All Science Journal Classification (ASJC) codes

Economics and Econometrics
Business and International Management
Finance

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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https://doi.org/10.1093/rcfs/cfr001

Cite this

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Negotiating with labor under financial distress

Abstract

All Science Journal Classification (ASJC) codes

UN SDGs

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