Bargaining Power, Strike Duration, and Wage Outcomes: An Analysis of Strikes in the 1880s

David Card, Craig A. Olson

NBER Working Paper No. 4075
Issued in May 1992
NBER Program(s):Development of the American Economy, Labor Studies

We study strike durations and outcomes for some 2000 disputes that occurred between 1881 and 1886. Most post-strike bargaining settlements in the 1880s fell into one of two categories: either a union "victory", characterized by a significant wage gain or hours cut, or a union "defeat", characterized by the resumption of work at the previous terms of employment. We find a strong negative relation between strike duration and the value of the settlement to workers. reflecting the declining probability of a union victory among longer strikes. For the subset of strikes over wage increases we estimate a structural model that includes equations for the capitulation times of the two parties and a specification of the wage increase conditional on a union victory. This framework provides a simple index of employees' relative bargaining power. based on the relative time to a union capitulation. Employees' relative bargaining power was higher in disputes involving fewer workers and in union ordered strikes. but substantially lower after the Haymarket Square incident in Chicago in 1886.

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Document Object Identifier (DOI): 10.3386/w4075

Published: Journal of Labor Economics, Vol. 13, No. 1, pp. 32-61, January 1995. citation courtesy of

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