NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Strikes and Wages: A Test of a Signalling Model

David Card

NBER Working Paper No. 2550
Issued in March 1988
NBER Program(s):   LS

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.

download in pdf format
   (1555 K)

download in djvu format
   (502 K)

email paper

This paper is available as PDF (1555 K) or DjVu (502 K) (Download viewer) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w2550

Published: "Strikes and Wages: A Test of an Asymmetric Information Model," Quarterly Journal of Economics, Vol. 110, No. 3, pp. 625-659, (August 1990).

Users who downloaded this paper also downloaded these:
Card and Olson w4075 Bargaining Power, Strike Duration, and Wage Outcomes: An Analysis of Strikes in the 1880s
Fernández and Glazer w3108 Striking for a Bargain Between Two Completely Informed Agents
Gruber and Kleiner w15855 Do Strikes Kill? Evidence from New York State
Grossman and Perry t0056 Sequential Bargaining Under Asymmetric Information
Cramton, Gunderson, and Tracy w5105 The Effect of Collective Bargaining Legislation on Strikes and Wages
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us