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Full-Text Articles in Social and Behavioral Sciences
Wage Bargaining With Time-Varying Threats, Peter Cramton, Joseph Tracy
Wage Bargaining With Time-Varying Threats, Peter Cramton, Joseph Tracy
Peter Cramton
We study wage bargaining in which the union is uncertain about the firm's willingness to pay and threat payoffs vary over time. Strike payoffs change over time as replacement workers are hired, as strikers find temporary jobs, and as inventories or strike funds run out. We find that bargaining outcomes are substantially altered if threat payoffs vary. If dispute costs increase in the long-run, then dispute durations are longer, settlement rates are lower, and wages decline more slowly during the short-run (and may even increase). The settlement wage is largely determined from the long-run threat, rather than the short-run threat.
The Determinants Of U.S. Labor Disputes, Peter Cramton, Joseph Tracy
The Determinants Of U.S. Labor Disputes, Peter Cramton, Joseph Tracy
Peter Cramton
We present a bargaining model of union contract negotiations, in which the union decides between two threats: the union can strike or continue to work under the expired contract. The model makes predictions about the level of dispute activity and the form the disputes take. Strike incidence increases as the strike threat becomes more attractive, because of low unemployment or a real wage drop during the prior contract. We test these predictions by estimating logistic models of dispute incidence and dispute composition for U.S. labor contract negotiations from 1970 to 1989. We find empirical support for the model's key predictions, …
The Political Economy Of Nafta: The Global Crisis And Mexico, Melvin Burke
The Political Economy Of Nafta: The Global Crisis And Mexico, Melvin Burke
School of Economics Faculty Scholarship
The proposed North American Free Trade Agreement (NAFTA)1 between Canada, the United States of America and Mexico is a logical and perhaps inevitable extensions of the 1989 Free Trade Agreement (FTA) between Canada and the U.S.A. Both agreements are controversial and massive public opposition to them exists in all three countries2 for good reasons, as we shall see. The citizens of these three democracies have never been provided with a credible explanation of the need for agreement.