American Economic Review Vol. 116 No. 11 2026
Union Bargaining Power and the Amenity-Wage Trade-Off
Abstract
This paper studies how collective bargaining affects wages and amenities. By merging collective bargaining agreements (CBAs) to linked employer-employee data in Brazil, I combine rich contracted amenities with wage information. I implement a difference-in-differences strategy that exploits a court ruling enforcing CBA continuation (i.e., ultra-activity) to estimate the effects of union bargaining power. Strengthening unions raises wages and amenities without reducing employment—increasing retention despite some labor-labor substitution. A revealed-preference approach shows that amenities account for 45 percent of total compensation gains. These findings suggest that collective bargaining can offset monopsony power, but employers retain the right-to-manage workforce composition.
- DOI
- 10.1257/aer.20240766
- Volume
- 116
- Issue
- 11
- Pages
- 4116-4157
- Language
- en
- Sources
- crossref openalex openalex