Market power in the hands of a supplier — such as a labor union — affects a firm’s optimal debt policy. If a firm maintains a high level of liquidity, workers may be encouraged to raise wage demands. In the presence of external finance constraints, a firm has an incentive to use the cash flow demands of debt service payments to improve its bargaining position. Using both cross-sectional estimat...

This paper reviews changes occurring in the U.S. industrial relations system at the workplace, in collective bargaining, and at the level of strategic decision making within business and labor organizations. By relating these current developments to longer term pressures on the post New Deal industrial relations system, we suggest that the system is undergoing fundamental transformation. To ada...

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The paper examines the role of collective bargaining systems as a determinant of the inter-industry wage structure. It compares wage patterns of six countries: Austria, Canada, Germany, Norway, Sweden and the U.S.. We use comparable wage regressions from micro cross-sections data to calculate inequality in pay across sectors. Our findings suggest the following: First, high (low) wage sectors in...

We attempt to explain the severe 1920-21 recession, the roaring 1920s boom, and the slide into the Great Depression after 1929 in a unified framework. The model combines monopolistic product market competition with search frictions in the labor market, allowing for both individual and collective wage bargaining. We attribute the extraordinary macroeconomic and financial volatility of this perio...

An approach to collective bargaining, in which structure and governance are carefully introduced into a contract, can act as a kind of restraint on both parties and minimize the scope of adversarial relationships to those matters for which there appears to be no alternative. By enlarging the role and responsibilities of faculty governance within the collective bargaining agreement, such alterna...