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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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  • Peter Cramton & Joseph S. Tracy, 1994. "The Determinants of U.S. Labor Disputes," Papers of Peter Cramton 94jole, University of Maryland, Department of Economics - Peter Cramton, revised 09 Jun 1998.
  • Handle: RePEc:pcc:pccumd:94jole
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    Cited by:

    1. 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.
    2. Mauleon, Ana & Vannetelbosch, Vincent, 2010. "Market integration and strike activity," Journal of International Economics, Elsevier, vol. 81(1), pages 154-161, May.
    3. Filippo Belloc, 2019. "Labor Conflict at the Workplace: Do Dismissal Regulations Matter?," Department of Economics University of Siena 806, Department of Economics, University of Siena.
    4. 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.
    5. 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.
    6. Louis Christofides & Amy Chen Peng, 2007. "Real Wage Chronologies," CESifo Working Paper Series 2096, CESifo.
    7. Danziger, Leif, 2008. "Extension of labor contracts and optimal backpay," Labour Economics, Elsevier, vol. 15(1), pages 18-36, February.
    8. Mauleon, Ana & Vannetelbosch, Vincent J., 2003. "Market competition and strike activity," International Journal of Industrial Organization, Elsevier, vol. 21(5), pages 737-758, May.
    9. Ana Mauleon & Vincent Vannetelbosch, 2013. "Relative Concerns and Delays in Bargaining with Private Information," Games, MDPI, Open Access Journal, vol. 4(3), pages 1-10, June.
    10. 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, December.
    11. van Ours, Jan C., 1999. "The cyclical behavior of holdout durations," Economics Letters, Elsevier, vol. 62(3), pages 365-370, March.
    12. 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.
    13. Brett W. Myers & Alessio Saretto, 2016. "Does Capital Structure Affect the Behavior of Nonfinancial Stakeholders? An Empirical Investigation into Leverage and Union Strikes," Management Science, INFORMS, vol. 62(11), pages 3235-3253, November.
    14. Belloc, Filippo, 2021. "Industrial actions and firing regimes: How deregulating worker “Exit” reshapes worker “Voice”," Structural Change and Economic Dynamics, Elsevier, vol. 56(C), pages 251-264.
    15. Kennan, John, 1995. "Repeated contract negotiations with private information," Japan and the World Economy, Elsevier, vol. 7(4), pages 447-472, November.
    16. Ahmet Ozkardas & Agnieszka Rusinowska, 2014. "Holdout threats of the union during wage bargaining," Documents de travail du Centre d'Economie de la Sorbonne 14072, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    17. William H. Greene & Ana P. Martins, 2002. "Striking Features of the Labor Market," EERI Research Paper Series EERI RP 2002/08, Economics and Econometrics Research Institute (EERI), Brussels.
    18. Ana Mauleon & Vincent Vannetelbosch, 2005. "Strategic union delegation and strike activity," Canadian Journal of Economics, Canadian Economics Association, vol. 38(1), pages 149-173, February.
    19. William H. Greene & Ana P. Martins, 2013. "Striking Features of the Labor Market: Theory," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 56(2), pages 1-24.
    20. M Parameswaran, 2021. "Trade Openness and Labour Market Unrest: Evidence from Indian Manufacturing Industry," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 19(2), pages 345-373, June.
    21. A. Mauleon & Vincent Vannetelbosch & Cecilia Vergari, 2014. "Unions' Relative Concerns And Strikes In Wage Bargaining," Bulletin of Economic Research, Wiley Blackwell, vol. 66(4), pages 374-383, October.
    22. 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.
    23. Miguel Malo & Nuria Sánchez-Sánchez, 2014. "The legal form of labour conflicts and their time persistence: an empirical analysis with a large firms’ panel," European Journal of Law and Economics, Springer, vol. 38(3), pages 513-533, December.
    24. William H. Greene & Ana P. Martins, 2013. "Striking Features of the Labor Market: Empirical Evidence," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 56(2), pages 25-53.

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    More about this item

    Keywords

    Bargaining; Contract Negotiations; Strikes;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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