Strikes and Wages: A Test of a Signalling Model / David Card.

Format:

Book

Author/Creator:

Card, David.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w2550.

NBER working paper series no. w2550

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Strikes and Wages

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1988.

Summary:

This paper describes a simple model of labor disputes based on the hypothesis that unions use strikes to infer the level of profitability of the firm. The implications of the model are then tested using data on wage outcomes, strike probabilities, and strike durations for a large sample of collective bargaining agreements. Negotiated wages are found to depend negatively on regional unemployment rates and positively on industry-specific selling prices. Contrary to the basic premise of the model, however, there is no evidence of a systematic relation between wages and strike outcomes. Increases in unemployment are found to decrease the probability of strikes, while increases in industry selling prices increase the probability of disputes. Strike durations are only weakly related to unemployment and industry prices, but are negatively correlated with industry output.

Notes:

Print version record

April 1988.