NBER

Ricardo Enriquez

Harvard University

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Institutional Affiliation: Harvard University

NBER Working Papers and Publications

July 2011Negotiating with Labor Under Financial Distress
with Efraim Benmelech, Nittai K. Bergman: w17192
We analyze how firms renegotiate labor contracts to extract concessions from labor. While anecdotal evidence suggests that firms tend to renegotiate down wages in times of financial distress, there is no empirical evidence that documents such renegotiation, its determinants, and its magnitude. This paper attempts to fill this gap. Using a unique data set of airlines that includes detailed information on wages and pension plans we document an empirical link between airline financial distress, pension underfunding, and wage concessions.

Published: Benmelech, Efraim, Nittai Bergman and Ricardo Enriquez. 2012. Negotiating with Labor Under Financial Distress. Review of Corporate Finance Studies. 1: 28-67. citation courtesy of

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