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The Effect of Collective Bargaining Legislation on Strikes and Wages

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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.

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File URL: http://www.cramton.umd.edu/papers1995-1999/99restat-effect-of-collective-bargaining-legislation.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 99res.

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Length: 38 pages
Date of creation: 1999
Date of revision: 30 Jul 1998
Publication status: Published in Review of Economics and Statistics, 81:3, 1999, pages 475-487.
Handle: RePEc:pcc:pccumd:99res

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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: Collective Bargaining; Strikes; Labor Legislation;

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References

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  1. 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.
  2. David Card, 1986. "Longitudinal Analysis of Strike Activity," Working Papers 593, Princeton University, Department of Economics, Industrial Relations Section..
  3. Cramton, Peter C & Tracy, Joseph S, 1992. "Strikes and Holdouts in Wage Bargaining: Theory and Data," American Economic Review, American Economic Association, vol. 82(1), pages 100-121, March.
  4. 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.
  5. 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.
  6. Budd, J.W., 1993. "Canadian Strike Replacement Legislation and Collective Bargainig : Lessons for United States," Papers 93-08, Minnesota - Industrial Relations Center.
  7. Harrison, Alan & Stewart, Mark, 1989. "Cyclical Fluctuations in Strike Durations," American Economic Review, American Economic Association, vol. 79(4), pages 827-41, September.
  8. 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.
  9. 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.
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Citations

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Cited by:
  1. Oechssler, Jörg & Roider, Andreas & Schmitz, Patrick W., 2009. "Cooling-Off in Negotiations - Does It Work?," Working Papers 0463, University of Heidelberg, Department of Economics.
  2. Carlos Diaz-Moreno & Jose E. Galdon-Sanchez, 2000. "Collective Bargaining under Complete Information," STICERD - Theoretical Economics Paper Series 401, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  3. Robert Rich & Joseph Tracy, 2000. "Uncertainty and Labor Contract Durations," NBER Working Papers 7731, National Bureau of Economic Research, Inc.
  4. Goerke, Laszlo & Schnabel, Claus, 2002. "On strike insurance," Discussion Papers 12, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  5. Peter Cramton & Joseph S. Tracy, 1998. "The Use of Replacement Workers in Union Contract Negotiations: The U.S. Experience, 1980-1989," Papers of Peter Cramton 98jole, University of Maryland, Department of Economics - Peter Cramton, revised 09 Jun 1998.
  6. Budd, J.W., 1995. "The Effect of Strike Replacement Legislation of Employment," Papers 95-04, Minnesota - Industrial Relations Center.
  7. 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.
  8. 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.
  9. Michael Huberman & Denise Young, 2000. "Hope against Hope: Persistent Canadian Unions in the Interwar Years," CIRANO Working Papers 2000s-28, CIRANO.
  10. 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.
  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. Sergi Jiménez-Martín & Jaume Garcia, 2010. "Initial offers and outcomes in wage bargaining: who wins?," Empirical Economics, Springer, vol. 39(3), pages 815-846, December.
  13. John Budd & Yijiang Wang, . "Labor Policy and Investment," Working Papers 0502, Human Resources and Labor Studies, University of Minnesota (Twin Cities Campus).

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