The Effect of Collective Bargaining Legislation on Strikes and Wages

34 Pages Posted: 23 Jun 2000

See all articles by Peter Cramton

Peter Cramton

University of Maryland - Department of Economics

Morley Gunderson

University of Toronto - Department of Economics

Joseph S. Tracy

Federal Reserve Bank of New York; National Bureau of Economic Research (NBER)

Multiple version iconThere are 3 versions of this paper

Date Written: May 1995

Abstract

Using Canadian data on large, private-sector contract negotiations from January 1967 to March 1993, we find that wages and strikes are substantially influenced by labor policy. In particular, we find that prohibiting the use of replacement workers during strikes is associated with significantly higher wages, and more frequent and longer strikes. This is consistent with private information theories of bargaining. We estimate the welfare consequences of a ban on replacement workers, as well as other labor policies. Despite the higher dispute costs, union workers are better off with a ban on replacement workers. The higher wage more than compensates for the more frequent and longer strikes.

Suggested Citation

Cramton, Peter C. and Gunderson, Morley and Tracy, Joseph, The Effect of Collective Bargaining Legislation on Strikes and Wages (May 1995). NBER Working Paper No. w5105. Available at SSRN: https://ssrn.com/abstract=225170

Peter C. Cramton (Contact Author)

University of Maryland - Department of Economics ( email )

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Morley Gunderson

University of Toronto - Department of Economics ( email )

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Joseph Tracy

Federal Reserve Bank of New York ( email )

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National Bureau of Economic Research (NBER) ( email )

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