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Bargaining Power, Strike Durations, and Wage Outcomes: An Analysis of Strikes in the 1880s

  • David Card
  • Craig A. Olson

We study strike durations and outcomes for some 2000 disputes that occurred between 1881 and 1886. Most post-strike bargaining settlements in the 1880s fell into one of two categories: either a union "victory", characterized by a significant wage gain or hours cut, or a union "defeat", characterized by the resumption of work at the previous terms of employment. We find a strong negative relation between strike duration and the value of the settlement to workers. reflecting the declining probability of a union victory among longer strikes. For the subset of strikes over wage increases we estimate a structural model that includes equations for the capitulation times of the two parties and a specification of the wage increase conditional on a union victory. This framework provides a simple index of employees' relative bargaining power. based on the relative time to a union capitulation. Employees' relative bargaining power was higher in disputes involving fewer workers and in union ordered strikes. but substantially lower after the Haymarket Square incident in Chicago in 1886.

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Paper provided by Princeton University, Department of Economics, Industrial Relations Section. in its series Working Papers with number 674.

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Date of creation: Jan 1992
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Handle: RePEc:pri:indrel:dsp01xs55mc07s
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  1. Hayes, Beth, 1984. "Unions and Strikes with Asymmetric Information," Journal of Labor Economics, University of Chicago Press, vol. 2(1), pages 57-83, January.
  2. Joel Sobel & Takahashi, 1983. "A Multi-stage Model of Bargaining," Levine's Working Paper Archive 255, David K. Levine.
  3. Ashenfelter, O. & Currie, J. & Farber, H.S., 1990. "An Experimental Comparison Of Dispute Rates In Alternative Arbritation Systems," Working papers 562, Massachusetts Institute of Technology (MIT), Department of Economics.
  4. Kennan, John & Wilson, Robert, 1989. "Strategic Bargaining Models and Interpretation of Strike Data," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 4(S), pages S87-130, Supplemen.
  5. Moffitt, Robert, 1985. "Unemployment insurance and the distribution of unemployment spells," Journal of Econometrics, Elsevier, vol. 28(1), pages 85-101, April.
  6. Kennan, John & Wilson, Robert, 1993. "Bargaining with Private Information," Journal of Economic Literature, American Economic Association, vol. 31(1), pages 45-104, March.
  7. 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.
  8. McConnell, Sheena, 1989. "Strikes, Wages, and Private Information," American Economic Review, American Economic Association, vol. 79(4), pages 801-15, September.
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