@article{01459ee223614b73a3da9b7402e76be3,
title = "Negotiating with labor under financial distress",
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.",
author = "Efraim Benmelech and Bergman, {Nittai K.} and Enriquez, {Ricardo J.}",
note = "Funding Information: For useful comments, we thank Rene Adams, Ulf Axelson, David Autor, Ilona Babenko (our discussant at the Hong Kong University of Science and Technology{\textquoteright}s (HKUST) finance symposium), Richard Freeman, Luigi Guiso, Marcin Kacperczyk, Steve Kaplan, Larry Katz, David Matsa, Marco Pagano, Nancy Qian, Joshua Rauh (the editor), Andrei Shleifer, Jeremy Stein, Oren Sussman (our discussant at Oxford University), Michael Weisbach, Toni Whited, an anonymous referee, and seminar participants at the 2011 American Finance Association meetings in Denver, Banca d{\textquoteright}Italia, Brandeis University, Columbia University, Harvard Law School, Harvard University (economics), Hebrew University, 2009 Hong Kong University of Science and Technology Finance Symposium on Corporate Finance, NBER Corporate Finance meeting, New York University (Stern), Northwestern (Kellogg), Einaudi Institute for Economics and Finance, Saı¨d Business School Labour and Finance Conference, University of Melbourne, University of Michigan (Ross), and University of New South Wales. All errors are our own. Benmelech is grateful for financial support from the National Science Foundation under the CAREER award SES-0847392. Address correspondence to Efraim Benmelech, Department of Economics, Harvard University, Littauer Center, Cambridge, MA 02138. E-mail: effi_benmelech@harvard.edu. Publisher Copyright: {\textcopyright} 2012 The Author.",
year = "2012",
month = jan,
day = "1",
doi = "10.1093/rcfs/cfr001",
language = "English (US)",
volume = "1",
pages = "28--67",
journal = "Review of Corporate Finance Studies",
issn = "2046-9128",
publisher = "Oxford University Press",
number = "1",
}