Learning from the Interest Arbitration Experience: The Next Round

INDUSTRIAL AND LABOR RELATIONS REVIEW, January 1997

Posted: 31 Oct 1996

See all articles by Craig A. Olson

Craig A. Olson

University of Illinois at Urbana-Champaign - School of Labor & Employment Relations

Barbara L. Rau

University of Wisconsin - Oshkosh - College of Business

Abstract

In final offer arbitration the decision of the arbitrator provides the parties with information about the preferences of the arbitrator that is not available prior to the award. Using data from Wisconsin teacher negotiations from 1977 to 1986, the authors find that the information contained in an award altered the parties' expectations about the arbitrator's preferences and influenced the subsequent negotiated settlement. The negotiated settlement following an award was higher when the union's final offer was selected than when the employer's offer was selected. In the round following an award, the variance in negotiated settlements declined, and the wage structure toward which the settlements converged was one that conformed with the arbitrator's views of fairness.

JEL Classification: J45, J51

Suggested Citation

Olson, Craig A. and Rau, Barbara L., Learning from the Interest Arbitration Experience: The Next Round. INDUSTRIAL AND LABOR RELATIONS REVIEW, January 1997, Available at SSRN: https://ssrn.com/abstract=3456

Craig A. Olson (Contact Author)

University of Illinois at Urbana-Champaign - School of Labor & Employment Relations ( email )

504 East Armory Avenue
Champaign, IL 61820-6297
United States

Barbara L. Rau

University of Wisconsin - Oshkosh - College of Business ( email )

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