From conflict to compromise: The importance of mediation in Swedish work stoppages, 1907-27

"Institutions for prevention and resolution of labor market conflicts were introduced all over the world in the early twentieth century. We analyze the first 20 years of mediation in the Swedish labor market. The Swedish mediators were personally appointed, enjoyed high levels of social prestige, and were responsible for conflict prevention and resolution within geographical districts. Despite limited authority and access to economic resources, we estimate that the presence of mediation in a conflict resulted in about 30 per cent higher probability of a compromise outcome. Mediation was more likely to work as intended in settings where conflicting parties recognize each other and struggle over a prize that can be divided. By constructing a geocoded panel dataset consisting of all reported work stoppages in Sweden 1903-27, we aim to disentangle the causal effect of mediation at the local level. Our results suggest that mediation could have paved the way for a cooperative atmosphere in the local labour market. At the national level such an atmosphere was clearly manifested in the General Agreement in 1938 and with the rise of the Swedish Model."