Negotiating with Labor under Financial Distress
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. T...
| Main Authors: | , , |
|---|---|
| Other Authors: | |
| Format: | Article |
| Language: | en_US |
| Published: |
Oxford University Press on behalf of The Society for Financial Studies
2014
|
| Online Access: | http://hdl.handle.net/1721.1/87605 https://orcid.org/0000-0001-6486-333X |
| _version_ | 1826192719174696960 |
|---|---|
| author | Benmelech, Efraim Bergman, Nittai Enriquez, Ricardo J. |
| author2 | Sloan School of Management |
| author_facet | Sloan School of Management Benmelech, Efraim Bergman, Nittai Enriquez, Ricardo J. |
| author_sort | Benmelech, Efraim |
| collection | MIT |
| description | 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. |
| first_indexed | 2024-09-23T09:27:52Z |
| format | Article |
| id | mit-1721.1/87605 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T09:27:52Z |
| publishDate | 2014 |
| publisher | Oxford University Press on behalf of The Society for Financial Studies |
| record_format | dspace |
| spelling | mit-1721.1/876052022-09-26T11:34:19Z Negotiating with Labor under Financial Distress Benmelech, Efraim Bergman, Nittai Enriquez, Ricardo J. Sloan School of Management Bergman, Nittai 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. National Science Foundation (U.S.) (CAREER award SES-0847392) 2014-06-02T17:05:19Z 2014-06-02T17:05:19Z 2012-02 Article http://purl.org/eprint/type/JournalArticle 2046-9128 2046-9136 http://hdl.handle.net/1721.1/87605 Benmelech, E., N. K. Bergman, and R. J. Enriquez. “Negotiating with Labor Under Financial Distress.” Review of Corporate Finance Studies 1, no. 1 (September 1, 2012): 28–67. https://orcid.org/0000-0001-6486-333X en_US http://dx.doi.org/10.1093/rcfs/cfr001 Review of Corporate Finance Studies Creative Commons Attribution-Noncommercial-Share Alike http://creativecommons.org/licenses/by-nc-sa/4.0/ application/pdf Oxford University Press on behalf of The Society for Financial Studies MIT web domain |
| spellingShingle | Benmelech, Efraim Bergman, Nittai Enriquez, Ricardo J. Negotiating with Labor under Financial Distress |
| title | Negotiating with Labor under Financial Distress |
| title_full | Negotiating with Labor under Financial Distress |
| title_fullStr | Negotiating with Labor under Financial Distress |
| title_full_unstemmed | Negotiating with Labor under Financial Distress |
| title_short | Negotiating with Labor under Financial Distress |
| title_sort | negotiating with labor under financial distress |
| url | http://hdl.handle.net/1721.1/87605 https://orcid.org/0000-0001-6486-333X |
| work_keys_str_mv | AT benmelechefraim negotiatingwithlaborunderfinancialdistress AT bergmannittai negotiatingwithlaborunderfinancialdistress AT enriquezricardoj negotiatingwithlaborunderfinancialdistress |