The aim of this project is to develop and empirically test strategic bargaining models applied to union contract negotiations. A prominent feature of the contract data is the holdout: negotiations often continue without a strike after the contract has expired. Production continues with workers paid according to the expired contract. A model was developed that accounts for the union's threat choice. A key prediction of the model is that variation in strike incidence is caused by shifts in the composition of disputes. Strike activity varies with economic and policy variables that change the attractiveness of the strike threat relative to the holdout threat. Preliminary empirical results generally support this prediction. Also there is some evidence of a structural shift in negotiations after 1981. This project will build on these preliminary results. First, the data for empirical tests will be added to and refined. Second, estimation strategies that incorporate the main features of the theory will be developed and implemented. Third, the issue of permanent strike replacements will be studied. In particular, the role that permanent replacements played in the structural shift in negotiations after 1981 will be addressed. A theoretical and empirical analysis of strike replacements will add to the current policy debate on whether firms should be able to permanently replace striking workers.
