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Author: Santa-Maria, Hugo
Resulting in 1 citation.
1. Santa-Maria, Hugo
The Transaction Cost Economics Approach to the Organization of Labor: An Empirical Analysis
Ph.D. Dissertation, Washington University, 1998.
Also: http://www.worldcat.org/title/transaction-cost-economics-approach-to-the-organization-of-labor-an-empirical-analysis/oclc/39310713
Cohort(s): NLSY79
Publisher: UMI - University Microfilms, Bell and Howell Information and Learning
Keyword(s): Collective Bargaining; Human Capital; Labor Economics; Unions; Wages

Williamson, Wachter, and Harris (1975), Klein, Crawford, and Alchian (1978), and Williamson (1985) developed the Transaction Cost Economics (TCE) approach to the organization of labor. The basic insight is that the collectivization of the employment agreement can economize in transaction costs generated by the presence of firm-specific human capital. The dissertation tests the two main hypotheses that the theory has developed regarding the relation between firm-specific human capital, collective employment agreements, and wages: H1: Collective employment agreements are more likely to be in place when firm-specific human capital is present. H2: Jobs with firm-specific human capital content should exhibit a lower collective-bargaining-agreement wage premium than jobs without firm-specific human capital.H1 follows the logic of most TCE empirical papers. It examines how the attributes of the transaction (dominated by the presence of firm-specific human capital) determines the organizational choice (the collectivization of the employment agreement). The test of H2 complements the examination of the first hypothesis by focusing on the effect of the organizational choice on the transaction prices (wages). H2 completes the TCE argument and forces the discussion of alternative hypotheses that may be observationally equivalent to TCE propositions, in tests focused on the relationship between the attributes of the transactions and the organizational choice. Standard econometric tools of labor economics are applied to the National Longitudinal Survey of Youth of Ohio State University (1988 cohort) to perform the empirical tests. The results are consistent with H1, but not with H2 and, therefore, question the validity of the TCE's empirical predictions. This dissertation is an example of the problems of limiting the test of the TCE approach to verifying whether the observable attributes of the transactions line up with the organizational choice in a way consistent with the theory's prediction. Empirical tests should also examine the effects of the organizational choice on transaction prices, productivity, or other measures of performance to get an indication that transaction-cost economizing is actually taking place. As the review in Klein and Shelanski (1994) shows, very little has been done in this direction.
Bibliography Citation
Santa-Maria, Hugo. The Transaction Cost Economics Approach to the Organization of Labor: An Empirical Analysis. Ph.D. Dissertation, Washington University, 1998..