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The Effect Of Collective Bargaining Legislation On Strikes And Wages

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  • Peter Cramton
  • Morley Gunderson
  • Joseph Tracy

Abstract

Using Canadian data on large, private-sector contract negotiations from January, 1967, to March, 1993, we find that strikes and wages are substantially influenced by labor policy. The data indicate that conciliation policies have largely been ineffective in reducing strike costs. In contrast, general contract reopener provisions appear to make both unions and employers better off by reducing negotiation costs without systematically affecting wage settlements. Legislation banning the use of replacement workers appears to lead to significantly higher negotiation costs and redistribution of quasi-rents from employers to unions. © 1999 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology

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Bibliographic Info

Article provided by MIT Press in its journal The Review of Economics and Statistics.

Volume (Year): 81 (1999)
Issue (Month): 3 (August)
Pages: 475-487

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Handle: RePEc:tpr:restat:v:81:y:1999:i:3:p:475-487

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References

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  1. Card, David, 1988. "Longitudinal Analysis of Strike Activity," Journal of Labor Economics, University of Chicago Press, vol. 6(2), pages 147-76, April.
  2. Christofides, Louis N & Swidinsky, Robert & Wilton, David A, 1980. "A Microeconometric Analysis of Spillovers within the Canadian Wage Determination Process," The Review of Economics and Statistics, MIT Press, vol. 62(2), pages 213-21, May.
  3. Budd, J.W., 1993. "Canadian Strike Replacement Legislation and Collective Bargainig : Lessons for United States," Papers 93-08, Minnesota - Industrial Relations Center.
  4. Peter Cramton & Joseph S. Tracy, 1992. "Strikes and Holdouts in Wage Bargaining: Theory and Data," Papers of Peter Cramton 92aer, University of Maryland, Department of Economics - Peter Cramton, revised 09 Jun 1998.
  5. Ashenfelter, Orley & Johnson, George E, 1969. "Bargaining Theory, Trade Unions, and Industrial Strike Activity," American Economic Review, American Economic Association, vol. 59(1), pages 35-49, March.
  6. Gunderson, Morley & Kervin, John & Reid, Frank, 1986. "Logit Estimates of Strike Incidence from Canadian Contract Data," Journal of Labor Economics, University of Chicago Press, vol. 4(2), pages 257-76, April.
  7. Currie, Janet & McConnell, Sheena, 1991. "Collective Bargaining in the Public Sector: The Effect of Legal Structure on Dispute Costs and Wages," American Economic Review, American Economic Association, vol. 81(4), pages 693-718, September.
  8. Harrison, Alan & Stewart, Mark, 1989. "Cyclical Fluctuations in Strike Durations," American Economic Review, American Economic Association, vol. 79(4), pages 827-41, September.
  9. Reder, Melvin W & Neumann, George R, 1980. "Conflict and Contract: The Case of Strikes," Journal of Political Economy, University of Chicago Press, vol. 88(5), pages 867-86, October.
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Citations

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Cited by:
  1. Oechssler, Jörg & Roider, Andreas & Schmitz, Patrick W., 2008. "Cooling-Off in Negotiations - Does It Work?," CEPR Discussion Papers 6807, C.E.P.R. Discussion Papers.
  2. Peter C. Cramton & Joseph S. Tracy, 1995. "The Use of Replacement Workers in Union Contract Negotiations: The U.S. Experience, 1980-1989," NBER Working Papers 5106, National Bureau of Economic Research, Inc.
  3. Jaume Garcia, & Sergi Jiménez-Martín, 2007. "Initial Offers and Outcomes in Wage Barganing: Who Wins?," Working Papers 2007-22, FEDEA.
  4. Budd, John W., 2000. "The effect of strike replacement legislation on employment," Labour Economics, Elsevier, vol. 7(2), pages 225-247, March.
  5. Kai-Uwe Kuuhn & A. Jorge Padilla, 2002. "Union Power, Replacement and Labour Market Dynamics," Economic Journal, Royal Economic Society, vol. 112(479), pages 317-343, April.
  6. Robert Rich & Joseph Tracy, 2004. "Uncertainty and Labor Contract Durations," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 270-287, February.
  7. Carlos Diaz-Moreno & Jose E. Galdon-Sanchez, 2000. "Collective bargaining under complete information," LSE Research Online Documents on Economics 19337, London School of Economics and Political Science, LSE Library.
  8. Rupayan Pal & Bibhas Saha, 2008. "Union-oligopoly bargaining and entry deterrence: a reassessment of limit pricing," Journal of Economics, Springer, vol. 95(2), pages 121-147, November.
  9. Michael Huberman & Denise Young, 2000. "Hope against Hope: Persistent Canadian Unions in the Interwar Years," CIRANO Working Papers 2000s-28, CIRANO.
  10. Goerke, Laszlo & Schnabel, Claus, 2002. "On strike insurance," Discussion Papers 12, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  11. Paul Duffy & Susan Johnson, 2009. "The Impact of Anti-Temporary Replacement Legislation on Work Stoppages: Empirical Evidence from Canada," Canadian Public Policy, University of Toronto Press, vol. 35(1), pages 99-120, March.
  12. John Budd & Yijiang Wang, . "Labor Policy and Investment," Working Papers 0502, Human Resources and Labor Studies, University of Minnesota (Twin Cities Campus).
  13. Peter Cramton & Joseph Tracy, 2003. "Unions, Bargaining and Strikes," Papers of Peter Cramton 02ubs, University of Maryland, Department of Economics - Peter Cramton, revised 05 Sep 2002.

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