Using Canadian data on large, private-sector contract negotiations from January 1967 to March 1993, we find that wages and strikes are substantially influenced by labor policy. In particular, we find that prohibiting the use of replacement workers during strikes is associated with significantly higher wages, and more frequent and longer strikes. This is consistent with private information theories of bargaining. We estimate the welfare consequences of a ban on replacement workers, as well as other labor policies. Despite the higher dispute costs, union workers are better off with a ban on replacement workers. The higher wage more than compensates for the more frequent and longer strikes.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
5105.
Length: Date of creation: May 1995 Date of revision: Handle: RePEc:nbr:nberwo:5105
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Find related papers by JEL classification: J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
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John Budd & Yijiang Wang, .
"Labor Policy and Investment,"
Working Papers
0502, Industrial Relations Center, University of Minnesota (Twin Cities Campus).
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