The Effect of Collective Bargaining Legislation on Strikes and Wages

Peter Cramton, University of Maryland
Morley Gunderson, Ontario Institute for Studies in Education of the University of Toronto
Joseph Tracy, Federal Reserve Bank of New York

Abstract

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.