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The Use of Replacement Workers in Union Contract Negotiations: The U.S. Experience, 1980-1989

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  • Peter C. Cramton
  • Joseph S. Tracy

Abstract

It is argued in many circles that a structural change occurred in U.S. collective bargaining in the 1980s. We investigate the extent to which the hiring of replacement workers can account for this change. For a sample of over 300 major strikes since 1980, we estimate the likelihood of replacements being hired. We find that the risk of replacement declines during tight labor markets, and is lower for bargaining units with more experienced workers. We use the predicted replacement risk as an explanatory variable in a model of the union's choice between the strike and holdout threat. We find that strike usage decreases significantly as the predicted replacement risk increases. We estimate that a ban on the use of replacement workers would have increased strike incidence from 1982-1989 by 3 percentage points, a 30 percent increase.

Suggested Citation

  • Peter C. Cramton & Joseph S. Tracy, 1995. "The Use of Replacement Workers in Union Contract Negotiations: The U.S. Experience, 1980-1989," NBER Working Papers 5106, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:5106
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    References listed on IDEAS

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    1. repec:fth:prinin:306 is not listed on IDEAS
    2. 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.
    3. John F. Schnell & Cynthia L. Gramm, 1994. "The Empirical Relations between Employers' Striker Replacement Strategies and Strike Duration," ILR Review, Cornell University, ILR School, vol. 47(2), pages 189-206, January.
    4. Allen, Steven G, 2001. "Technology and the Wage Structure," Journal of Labor Economics, University of Chicago Press, vol. 19(2), pages 440-483, April.
    5. Henry S. Farber & Alan B. Krueger, 1992. "Union Membership in the United States: The Decline Continues," Working Papers 685, Princeton University, Department of Economics, Industrial Relations Section..
    6. Henry S. Farber & Alan Krueger, 1992. "Union Membership in the United States: The Decline Continues," Working Papers 685, Princeton University, Department of Economics, Industrial Relations Section..
    7. Gunderson, Morley & Melino, Angelo, 1990. "The Effects of Public Policy on Strike Duration," Journal of Labor Economics, University of Chicago Press, vol. 8(3), pages 295-316, July.
    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 867-886, 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 257-276, April.
    10. Daniel J. B. Mitchell, 1982. "Recent Union Contract Concessions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 13(1), pages 165-204.
    11. Bartel, Ann P & Sicherman, Nachum, 1998. "Technological Change and the Skill Acquisition of Young Workers," Journal of Labor Economics, University of Chicago Press, vol. 16(4), pages 718-755, October.
    12. 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.
    13. repec:mes:challe:v:25:y:1982:i:3:p:14-17 is not listed on IDEAS
    14. Anat R. Admati & Motty Perry, 1987. "Strategic Delay in Bargaining," Review of Economic Studies, Oxford University Press, vol. 54(3), pages 345-364.
    15. Cynthia L. Gramm & John F. Schnell, 1994. "Some Empirical Effects Of Using Permanent Striker Replacements," Contemporary Economic Policy, Western Economic Association International, vol. 12(3), pages 122-133, July.
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    Cited by:

    1. Jonathan Gruber & Samuel A. Kleiner, 2012. "Do Strikes Kill? Evidence from New York State," American Economic Journal: Economic Policy, American Economic Association, vol. 4(1), pages 127-157, February.
    2. David M. Frankel, 2010. "Rent Seeking and Economic Fragility," Levine's Bibliography 661465000000000159, UCLA Department of Economics.
    3. Barry T. Hirsch, 2008. "Sluggish Institutions in a Dynamic World: Can Unions and Industrial Competition Coexist?," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 153-176, Winter.
    4. Barry T. Hirsch, 2012. "Unions, dynamism, and economic performance," Chapters,in: Research Handbook on the Economics of Labor and Employment Law, chapter 4, pages 107-145 Edward Elgar Publishing.
    5. Bastos, Paulo & Kreickemeier, Udo & Wright, Peter, 2009. "Oligopoly, open shop unions and trade liberalisation," International Journal of Industrial Organization, Elsevier, vol. 27(6), pages 679-686, November.
    6. Henry S. Farber & Bruce Western, 2000. "Round Up The Usual Suspects: The Decline of Unions in The Private Sector, 1973-1998," Working Papers 816, Princeton University, Department of Economics, Industrial Relations Section..
    7. Henry S. Farber & Bruce Western, 2000. "Round Up The Usual Suspects: The Decline of Unions in The Private Sector, 1973-1998," Working Papers 816, Princeton University, Department of Economics, Industrial Relations Section..

    More about this item

    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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