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Collective Bargaining in the Public Sector: The Effect of Legal Structure on Dispute Costs and Wages

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  • Currie, Janet
  • McConnell, Sheena

Abstract

This paper examines the impact of collective-bargaining legislation on dispute costs and wages using a panel of Canadian public-sector contracts. The authors' results suggest that policymakers designing collective-bargaining legislation face a trade-off between reducing dispute costs and increasing wages. Dispute costs are lower under compulsory arbitration than under the right to strike or when no collective-bargaining legislation exists. Hence, a switch to compulsory arbitration could potentially make both the union and the employer better off by reducing dispute costs. However, the authors find that wages are higher under compulsory arbitration than under other legal structures. Copyright 1991 by American Economic Association.

Suggested Citation

  • 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.
  • Handle: RePEc:aea:aecrev:v:81:y:1991:i:4:p:693-718
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Zeng, Dao-Zhi, 2006. "How powerful is arbitration procedure AFOA?," International Review of Law and Economics, Elsevier, vol. 26(2), pages 227-240, June.
    2. 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.
    3. Surajeet Chakravarty, 2005. "Resolving Contractual Disputes: Arbitration vs Mediation," The Centre for Market and Public Organisation 05/117, Department of Economics, University of Bristol, UK.
    4. David Dickinson, 2009. "The Effects of Beliefs Versus Risk Attitude on Bargaining Outcomes," Theory and Decision, Springer, pages 69-101.
    5. Currie, Janet, 1994. "Arbitrator Behavior and the Variances of Arbitrated and Negotiated Wage Settlements," Journal of Labor Economics, University of Chicago Press, vol. 12(1), pages 29-40, January.
    6. Oczkowski, Edward, 1998. "An econometric analysis of the bilateral monopoly model," Economic Modelling, Elsevier, vol. 16(1), pages 53-69, January.
    7. Charness, Gary & Kuhn, Peter, 2011. "Lab Labor: What Can Labor Economists Learn from the Lab?," Handbook of Labor Economics, Elsevier.
    8. Janet Currie & Sheena McConnell, 1992. "The Impact of Collective Bargaining Legislation on Disputes in the U.S. Public Sector: No Policy May Be the Worst Policy," NBER Working Papers 3978, National Bureau of Economic Research, Inc.
    9. Janet Currie & Henry S. Farber, 1992. "Is Arbitration Addictive? Evidence From the Laboratory and the Field," Working Papers 675, Princeton University, Department of Economics, Industrial Relations Section..
    10. Peter Cramton & Morley Gunderson & Joseph Tracy, 1999. "The Effect Of Collective Bargaining Legislation On Strikes And Wages," The Review of Economics and Statistics, MIT Press, vol. 81(3), pages 475-487, August.
    11. repec:eee:labchp:v:3:y:1999:i:pc:p:3573-3630 is not listed on IDEAS
    12. Bolton, Gary E. & Katok, Elena, 1998. "Reinterpreting Arbitration's Narcotic Effect: An Experimental Study of Learning in Repeated Bargaining," Games and Economic Behavior, Elsevier, vol. 25(1), pages 1-33, October.
    13. Campolieti, Michele, 2015. "State dependence in the incidence of strikes: Evidence from Canadian contract data using Heckman’s dynamic probit model," Economics Letters, Elsevier, vol. 133(C), pages 7-9.
    14. Charness, Gary B, 1999. "Responsibility And Effort In An Experimental Labor Market," University of California at Santa Barbara, Economics Working Paper Series qt7x98w91h, Department of Economics, UC Santa Barbara.
    15. Anne Lauringson, 2010. "Measuring Union Bargaining Power In The Estonian Public Sector," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 72, Faculty of Economics and Business Administration, University of Tartu (Estonia).
    16. Charness, Gary, 2000. "Responsibility and effort in an experimental labor market," Journal of Economic Behavior & Organization, Elsevier, vol. 42(3), pages 375-384, July.
    17. Gregory, Robert G. & Borland, Jeff, 1999. "Recent developments in public sector labor markets," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 53, pages 3573-3630 Elsevier.

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