The Effect of Collective Bargaining Legislation on Strikes and Wages

Peter Cramton, Morley Gunderson and Joseph S. Tracy , The Review of Economics and Statistics 81(3) , 475-487 , August 1999.

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. The data indicate that conciliation policies have largely been ineffective in reducing strike costs. In contrast, contract reopener provisions appear to make both unions and firms better off by reducing negotiation costs without systematically affecting wage settlements. Legislation banning the use of replacement workers appears to lead to higher strike costs both by increasing the frequency and duration of strikes.

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