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The Determinants of U.S. Labor Disputes

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Abstract

We present a bargaining model of union contract negotiations, in which the union decides between two threats: the union can strike or continue to work under the expired contract. The model makes predictions about the level of dispute activity and the form the disputes take. Strike incidence increases as the strike threat becomes more attractive, because of low unemployment or a real wage drop during the prior contract. We test these predictions by estimating logistic models of dispute incidence and dispute composition for U.S. labor contract negotiations from 1970 to 1989. We find empirical support for the model's key predictions, but these associations are weaker after 1981.

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File URL: http://www.cramton.umd.edu/papers1990-1994/94jole-determinants-of-us-labor-disputes.pdf
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Bibliographic Info

Paper provided by University of Maryland, Department of Economics - Peter Cramton in its series Papers of Peter Cramton with number 94jole.

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Length: 30 pages
Date of creation: 1994
Date of revision: 09 Jun 1998
Publication status: Published in Journal of Labor Economics, 12:2, April 1994, pages 180-209.
Handle: RePEc:pcc:pccumd:94jole

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Postal: Economics Department, University of Maryland, College Park, MD 20742-7211
Phone: (202) 318-0520
Fax: (202) 318-0520
Web page: http://www.cramton.umd.edu

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Keywords: Bargaining; Contract Negotiations; Strikes;

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References

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  1. 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.
  2. Admati, Anat R & Perry, Motty, 1987. "Strategic Delay in Bargaining," Review of Economic Studies, Wiley Blackwell, vol. 54(3), pages 345-64, July.
  3. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
  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. Tracy, Joseph S, 1987. "An Empirical Test of an Asymmetric Information Model of Strikes," Journal of Labor Economics, University of Chicago Press, vol. 5(2), pages 149-73, April.
  6. John M. Abowd & Richard B. Freeman, 1991. "Immigration, Trade and the Labor Market," NBER Books, National Bureau of Economic Research, Inc, number abow91-1, June.
  7. John M. Abowd & Joseph S. Tracy, 1988. "Market Structure, Strike Activity, and Union Wage Settlements," NBER Working Papers 2595, National Bureau of Economic Research, Inc.
  8. Kennan, John & Wilson, Robert, 1989. "Strategic Bargaining Models and Interpretation of Strike Data," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 4(S), pages S87-130, Supplemen.
  9. John M. Abowd & Richard B. Freeman, 1990. "The Internationalization of the U.S. Labor Market," NBER Working Papers 3321, National Bureau of Economic Research, Inc.
  10. McConnell, Sheena, 1989. "Strikes, Wages, and Private Information," American Economic Review, American Economic Association, vol. 79(4), pages 801-15, September.
  11. Card, David, 1990. "Strikes and Bargaining: A Survey of the Recent Empirical Literature," American Economic Review, American Economic Association, vol. 80(2), pages 410-15, May.
  12. Michael L. Wachter & William H. Carter, 1989. "Norm Shifts in Union Wages: Will 1989 Be a Replay of 1969?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 20(2), pages 233-276.
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Citations

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Cited by:
  1. Malo, Miguel A. & Sanchez-sanchez, Nuria, 2011. "The legal form of labour conflicts and their time persistence: an empirical analysis with a large firms' panel," MPRA Paper 30117, University Library of Munich, Germany.
  2. Ana, MAULEON & Vincent, VANNETELBOSCH, 2005. "Market Integration and Strike Activity," Discussion Papers (ECON - Département des Sciences Economiques) 2005025, Université catholique de Louvain, Département des Sciences Economiques.
  3. MAULEON, Ana & VANNETELBOSCH, Vincent & VERGARI, Cecilia, 2010. "Unions' relative concerns and strikes in wage bargaining," CORE Discussion Papers 2010076, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  4. Louis Christofides & Amy Chen Peng, 2007. "Real Wage Chronologies," CESifo Working Paper Series 2096, CESifo Group Munich.
  5. Richard R. W. Brooks & Claudia M. Landeo & Kathryn E. Spier, 2010. "Trigger happy or gun shy? Dissolving common-value partnerships with Texas shootouts," RAND Journal of Economics, RAND Corporation, vol. 41(4), pages 649-673.
  6. Ana Mauleon & Vincent Vannetelbosch, 2013. "Relative Concerns and Delays in Bargaining with Private Information," Games, MDPI, Open Access Journal, vol. 4(3), pages 329-338, June.
  7. Leif Danziger & Shoshana Neuman, 2005. "Delays in Renewal of Labor Contracts: Theory and Evidence," Journal of Labor Economics, University of Chicago Press, vol. 23(2), pages 341-372, April.
  8. Kennan, John, 1995. "Repeated contract negotiations with private information," Japan and the World Economy, Elsevier, vol. 7(4), pages 447-472, November.
  9. Angur, Madhukar G. & Lotfi, Vahid & Sarkis, Joseph, 1996. "A hybrid conjoint measurement and bi-criteria model for a two group negotiation problem," Socio-Economic Planning Sciences, Elsevier, vol. 30(3), pages 195-206, September.
  10. Mauleon, Ana & Vannetelbosch, Vincent J., 2003. "Market competition and strike activity," International Journal of Industrial Organization, Elsevier, vol. 21(5), pages 737-758, May.
  11. Danziger, Leif, 2006. "Extension of Labor Contracts and Optimal Backpay," IZA Discussion Papers 2366, Institute for the Study of Labor (IZA).
  12. van Ours, Jan C., 1999. "The cyclical behavior of holdout durations," Economics Letters, Elsevier, vol. 62(3), pages 365-370, March.
  13. Sergi Jimenez-Martin & José M. Labeaga & Mariluz Marco, 1996. "Algunos factores explicativos de la existencia de huelgas durante la negociación colectiva en España," Investigaciones Economicas, Fundación SEPI, vol. 20(2), pages 217-242, May.
  14. Hiroko Okudaira, 2009. "The Economic Costs of Court Decisions Concerning Dismissals in Japan: Identification by Judge Transfers," ISER Discussion Paper 0733, Institute of Social and Economic Research, Osaka University.
  15. 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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