the missing link intra country evidence on the relationship between high and uncertain inflation from high inflation countries the notion that high inflation breeds high uncertainty about future inflation is widely accepted this acceptance is based largely on a positive correlation between the mean and variability of inflation across countries 2 this positive relationship is taken as evidence that high inflation creates high uncertainty 3 recently though driffill mizon and ulph 10 have questioned the relevance of this cross country evidence for making inferences about welfare issues within countries they argue that it is the relationship between the time series mean and variance within a country that is important when considering the potential costs of inflation in this paper we examine the within country time series link between the level and uncertainty of inflation for ten countries that experienced a period of very high inflation we use data generated from regression based forecasts of inflation and historical data on actual forecasts our sample does not provide evidence of a general positive link within these countries the ten countries we study are argentina bolivia brazil chile colombia israel mexico peru turkey and uruguay in these countries the average annualized rate of inflation from the quarterly data in our sample was about 54 per year and the average sample standard deviation

strikes and holdouts in wage bargaining theory and data we develop a private information model of union contract negotiations in which disputes signal a firm s willingness to pay previous models have assumed that all labor disputes take the form of a strike yet a prominent feature of u s collective bargaining is the holdout negotiations often continue without a strike after the contract has expired production continues with workers paid according to the expired contract we analyze the union s decision to strike or hold out and highlight its importance to strike activity strikes are more likely to occur after a drop in the real wage or a decline in unemployment

on the duration of agreements a model of optimal contracts between two infinitely lived parties a borrower and lender is presented and analyzed the objective is to explain the phenomenon of finite length multi period contracts it is shown how costly information acquisition can account for multi period contracts which are of bounded length comparative statics results on how contract length responds to exogenous parameters such as the cost of information acquisition are also derived copyright 1987 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

wage stickiness and the non neutrality of money a cross industry analysis abstract the paper provides an empirical test of sticky wage models of business fluctuations by focusing on industry level cross sectional implications that emerge this breaks the observational equivalence existing at the aggregate level between rational expectations long term contracting and imperfect information models the specific implication tested is whether output responses to nominal disturbances industry phillips curve slopes are inversely related to wage indexation elasticities the phillips curve slopes are found to vary across industries for the canadian economy but bear no relationship to indexation elasticities casting doubt on the role of nominal wage rigidity in generating the observed non neutrality of money

the effects of shock size and type on labor contract duration empirical studies of the relation between uncertainty and the length of union firm contracts have focused on the effects of inflation money supply or industry specific uncertainty this article describes two extensions of previous work first real aggregate uncertainty arising from oil shocks is incorporated into a contract duration model oil shocks significantly affect contract length in seven of 21 u s manufacturing industries second the model is used to test whether the duration of reopenable bargains is positively related to uncertainty associated with large shocks as has been described in danziger the evidence indicates some qualified support for this proposition

bargaining structure and nominal wage flexibility in a model with hetergenous agents wage setting by monopoly unions and monetary policy conducted by a central bank we show that the duration of nominal wage contracts is u shaped in the degree of centralization with intermediate bargaining systems yielding contracts of shorter duration and thus more flexible nominal wages than both decentralized and centralized systems we also find the degree of heterogeneity in the economy the theoretical predictions of the model are tested on oecd data there is empirical support for the main results regarding contract length while there is less support for the predictions regarding the level of centralization

the determinants of wage changes in indexed and nonindexed contracts a switching model wage changes in a sample 1979 86 of canadian wage contracts are analyzed the sample is split into cost of living allowance cola and non cola contracts econometric estimation corrects for sample selectivity bias in non cola contracts the unemployment rate and a proxy for expected inflation are significant expected industry price changes and productivity changes exert smaller but significant effects in cola contracts ex ante inflation coverage ranges between 60 and 100 of expected inflation catch up for previous uncompensated inflation the unemployment rate and expected inflation are also significant a common wage structure across cola and non cola contracts is rejected by the data

delays in renewal of labor contracts theory and evidence in many countries an expired labor contract is automatically extended during the often protracted delay before the new contract is signed our theoretical model focuses on macroeconomic factors in explaining the delay it emphasizes the importance of the realized nominal and real shocks and of the levels of nominal and real uncertainty the model is tested using israeli collective wage agreements where long delays are frequent the empirical findings strongly support the theoretical model thus nominal uncertainty is found to increase the delay and real uncertainty to decrease the delay but less in the public than in the private sector

the excess sensitivity of layoffs and quits to demand excessive layoffs in bad times and excessive quits in good times both stem from the same weakness in practical employment arrangements the specific nature of worker firm relations creates a situat

spatially variable property tax and optimal tax composition in congested monocentric cities george pigou ramsey and strotz unified abstract we explore the optimal spatial structure of the property tax in a monocentric city with transportation congestion to show how the availablity of revenue instruments impacts the properties of the optimal property tax we discuss three regimes with different combinations of a head tax congestion tolls and property tax in each regime the tax composition is optimally determined to finance a predetermined expenditure under the first regime with all the three taxes available the first best allocation is achievable only when the property tax is unused under the second regime where only head and property taxes are available a spatially variable property tax substitutes for the unavailable congestion tolls the head tax or subsidy fills the gap between the property tax revenue and the predetermined expenditure moreover property tax is negative positive close to the city center boundary under the third regime where only property tax is available the role of the property tax is twofold to substitute for the unavailable congestion tolls and to finance the predetermined expenditure in general for both roles the optimal tax rates are spatially variable furthermore if its role as a substitute for congestion tolls dominates its other role the property tax may be negative close to the boundary

on the prevalence of labor contracts with fixed duration the prevalence of labor contracts with fixed duration seems surprising why is a fixed duration preferred to a stochastic duration that depends on the consumer price index in this paper the specification of the contract duration is determined endogenously the wage rate can be indexed to the consumer price index but there is a loss since the indexation must be the same for different types of shocks this loss increases with the variability of the contract duration since the loss due to the contracting cost depends on the expected discounted duration only a fixed duration is chosen copyright 1992 by american economic association

congestable local public goods in an urban setting abstract in this paper we recognize two types of unpure local public goods lpgs congestable and pollutable this paper and the forthcoming one clubs in an urban setting mimeo 1980 are devoted to congestable lpgs clpg in part i we define classify and characterize clpgs clpgs may vary in their degree of congestability between zero in the case of a pure lpg and one in the case of a private good spatially we recognize two types of lpgs the dispersed lpg dilpg and the concentrated lpg colpg the first is distributed throughout the residential ring and the second is provided in specific locations to which households must travel the second part of this paper is devoted to the investigation of the properties of a cdilpg in an urban setting the properties of colpg are investigated in clubs in an urban setting mimeo 1980 a version of samuelson s rule as to the optimal allocation of pure public goods is extended on one hand to local dispersed public goods and on the other hand to clpgs two corrective pigouvian taxes are identified congestion tolls levied on households and a residential land tax these two taxes cover total government expenditure on the lpg the fraction of the expenses on the lpg covered by congestion tolls is and that covered by land taxes is 1 where is the degree of congestability efficiency can also be achieved by zoning the residential ring and regulating the housing density in it this procedure may replace taxation and its advantage is that we can control a large number of externalities by a single set of zoning rules and regulations an a posteriori rule to guide the local government as to the desirability of its actions is provided

optimal multiperiod contracts and the gain from enduring relationships under private information informational asymmetries can play a key role in explaining the existence and nature of multiperiod contracts in an illustrative risk sharing model even relatively short two period contracts can be mutually beneficial if there is private information though one period contracts suffice otherwise further contracts which are pareto optimal relative to the environment and the information structure are defined and partially characterized an example illustrates how otherwise inefficient intertemporal tie ins can be used optimally to mitigate incentive problems the obvious borrowing lending schemes are not private information pareto optimal in these period by period actions are not sufficiently constrained discounting affects the form of the optimal contract but none of these qualitative conclusions

dynamic equilibrium in markets for perennial crops a dynamic equilibrium model for perennial crop markets is formulated price expectations are formed according to perfect foresight and both the age composition of the crop and the optimal rotation are determined endogenously the model is applied to the california alfalfa market the calculated long run equilibrium acreage is quite close to average acreage over the base period the results also exhibit cyclical fluctuations in acreage with a six percent coefficient of variation thus cyclical behavior can arise from technical characteristics of the production process as well as from imperfectly formed expectations or random exogenous shocks

the interaction between indexation contract duration and non contingent wage adjustment a model of the elasticity of indexation contract duration and non contingent wage adjustment is estimated using canadian wage agreements results suggest that the degree of indexation and contract duration are interdependent and are affected by their past values labour market conditions and inflation uncertainty the correlation between the industry product prices and the cpi affects the degree of indexation non contingent wage adjustment depends on expected inflation uncompensated past inflation duration and indexation values past and present and labour market conditions this model explains total wage adjustment as well as more aggregative models designed solely for that purpose

an analysis of rubber supply in sri lanka an analysis of the supply response for perennial crops is undertaken for rubber in sir lanka focusing on the uprooting replanting decision and disaggregating the typical reduced form supply response equation into several structural relationships this approach is compared and contrasted with dowling s analysis of supply response for rubber in thailand which is based upon a sophisticated reduced form supply function developed by wickens and greenfield for brazilian coffee because the uprooting replanting decision is central to understanding rubber supply response in sri lanka and for other perennial crops where replanting activities dominate new planting the standard approaches do not adequately capture supply response

taxation and the tiebout model the differential effects of head taxes taxes on land rents and property taxes on the theory of state and local public finance is the seminal paper by charles tiebout 1956 tiebout constructed a multijurisdictional model in which independent local governments offer a wide variety of expenditure and tax policies and perfectly mobile consumers reveal their preferences for local public goods through their choice of residential community he argued that under such circumstances local public service provision would be efficient the tiebout model has formed the basis of a vast number of subsequent articles in the state and local public finance literature and has also been very influential in urban and regional economics the efficiency properties of various tiebout type models of local public good provision have been examined and the role of politics in these models has been debated at length in this literature of more direct relevance to this paper however is the fact that although tiebout had little to say directly about taxation simply assuming the existence of head taxes subsequent analyses have used adaptations of this model to examine the effects of local head taxes land taxes and property taxes it is the literature on the efficiency and distributional effects of alternative local taxes that is the subject of this survey 1

real shocks efficient risk sharing and the duration of labor contracts it is widely believed that increased uncertainty leads to shorter duration of labor contracts this is indeed also the result obtained in the formal analysis in gray 1978 who concludes that a s expected increased variability regardless of source shortens contract length 1978 p 8 the basic argument is that production is inefficient unless the real wage happens to equate the demand and supply of labor and that the loss due to inefficient production increases with the deviation of the actual real wage from the real wage that would equate the demand and supply of labor it is assumed that the economy is exposed to both aggregate real shocks and nominal shocks but that the wage can only be indexed to the general price level an imperfect signal of the underlying shocks since uncertainty is greater for more distant periods the deviation of the actual real wage from the real wage that would equate the demand and supply also tends to be greater for more distant periods and it follows that the per period expected loss due to inefficient production increases with contract duration consequently increased uncertainty provides an incentive to reduce contract durations the reason contracts do not become arbitrarily short is the existence of a fixed contracting cost that militates against shortening the contract duration the oil price hikes of 1973 and 1978 presumably increased the a priori importance of aggregate real shocks and the efficientproduction hypothesis therefore leads one to expect a decrease in contract durations in the years following the price hikes the empirical fact however is that there has been no such tendency at least not in the united states this is clearly brought out in table i which shows that the average duration of major collective bargaining settlements negotiated in 1972 1987 has remained roughly constant

cyclical fluctuations in strike durations canadian data on strikes between 1946 and 1983 are used to estimate linear regression models for the logarithm of completed duration a thorough investigation of the influence of the business cycle reveals strong support for the hypothesis that strike durations are countercyclical the cyclical effect is shown to be robust to both the choice of cyclical variable and the econometric specification and the magnitude of the effect is quite substantial experimentation with different representations of the cycle reveals that it is difficult to improve on a simple formulation involving a single continuous variable

the impact of controls on wage contract duration incomes policies invariably arouse considerable opposition it is claimed that they are costly to administer that by tinkering with relative prices they riddle the economy with inefficiencies and that they politicise economic life it is also argued that where controls do have an impact on wage rates and prices a point which is by no means universally conceded agents are driven to costly behaviour designed to neutralise effective wage and price ceilings e g wage drift and quality changes it is fair to say however that most of the empirical work on incomes policies has been directed rather narrowly at the question of whether controls affect wage rates earnings or prices somewhat off the beaten track has been the interesting paper by pencavel i982 in which he argued that the existence of costs in revising wage rates calls for a distinction between the frequency and magnitude of wage revisions pencavel i982 also argued that wage controls are sometimes directed toward postponing wage increases in which case they affect the frequency of wage change while at other times they specify permissible ceilings on wage increases designed to affect the magnitude of wage adjustments however even this paper deals with wage issues broadly defined there has been little work done on the impact of controls on other aspects of labour market behaviour the purpose of this paper is to explore the impact of canada s recent experiment with controls on wage contract duration this long neglected variable has received theoretical attention in a number of recent papers including fischer i977 who argued that in a world of overlapping contracts monetary policy is effective despite rational expectations gordon i982 who considered the implications of contracting arrangements for wage flexibility and gray i978 and canzoneri i980 who explored the impact of uncertainty on contract duration an empirical paper by christofides and wilton i983 b confirmed gray s i978 and canzoneri s i980 conclusion that inflation uncertainty reduces the length of wage contracts however no one appears to have examined carefully the impact of controls on this important

contract duration evidence from franchising abstract economists generally view standard franchise contracts as efficient while franchisee advocates view them as exploitive consistent with the economic view we find that contract duration is positively and significantly related to the franchisee s physical and human capital investments which are often firm specific in contrast to assertions by franchisee advocates we find that these relations exist in subsamples containing only the most established franchisors as measured by size and experience and that larger more experienced franchisors tend to offer longer term contracts than do newer franchisors our evidence also suggests that there is learning across firms about optimal contract terms

a near rational model of the business cycle with wage and price inertia this paper presents a model in which insignificantly suboptimal behavior causes aggregate demand shocks to have significant real effects the individual loss to agents with inertial price wage behavior is second order in terms of the parameter describing the shock while the effect on real economic variables is first order thus significant changes in business activity can be generated by anticipated money supply changes provided that some agents are willing to engage in nonmaximizing behavior which results in small losses

a letter to the editor on wage bargaining abstract the rubinstein perfect information alternating offers bargaining model is problematic when applied to wage negotiations a strike or any other industrial action is not an automatic consequence of a delay in reaching an agreement because production can continue normally also when negotiations take place this paper extends the rubinstein model to incorporate the choice of calling a strike and it is shown that in this model there is no longer a unique subgame perfect equilibrium and that strikes with a length in real time can occur in equilibrium

early contract renegotiation an analysis of us labor contracts 1970 1995 this article examines the ex post flexibility of us labor contracts during the 1970 95 period by investigating whether unanticipated changes in inflation increase the likelihood of a contract being renegotiated prior to its expiration we find empirical support for this hypothesis specifically our results indicate that renegotiations are triggered principally by large and infrequent price shocks of either sign when combined with evidence that ex ante contract durations are shorter during episodes of increased inflation uncertainty our results suggest that these contracts are flexible both ex ante and ex post to changes in the evolution of inflation

pollution and land use optimum and decentralization abstract space matters not only by inducing transport costs but also by mitigating pollution damages previous models of pollution either disregard space altogether or presume a predetermined separation between polluters and pollutees in our model workers commute to factories and all possible location combinations of housing and industry around a circle are considered we investigate optimal allocations and their decentralization the tradeoff between pollution costs and transport costs along with the non convexity inherent in spatial models results in multiple local optima with negligible commuting costs the optimal allocation has one industrial and one residential zone as commuting costs increase the number of zones of each type increases until an allocation is reached in which housing and industry are completely intermixed the global optimal allocation is decentralized by imposing a tax per unit area of industrial land at a particular location equal to the total damage caused by the pollution from that unit area evaluated at the global optimum location specific pigouvian taxes by themselves are inefficient

the wage price spiral this paper rehabilitates the old wage price spiral it shows that after an increase in aggregate demand the process of adjustment of nominal prices and nominal wages results from attempts by workers to maintain or increase their real wage and by firms to maintain or increase their markups of prices over wages under continuous price and wage setting the process of adjustment would be instantaneous under staggering of price and wage decisions the adjustment takes time the more inflexible real wages and markups are to shifts in demand the higher is the degree of price level inertia and the longer lasting are the effects of aggregate demand on output

determinants of contract duration in collective bargaining agreements the author develops a model incorporating variables that previous studies have hypothesized as determinants of labor contract duration then empirically tests the model using a data set containing

the design of contracts and remedies for breach in the first part of this article hypothetical contracts providing for all possible uncertain contingencies are considered in the next part contracts providing for only some contingencies are examined and are shown to be advantageous due both to difficulties that could arise in making and enforcing contingent terms and to the presence of implicit substitutes for them in the following major part of the article two of these substitutes for contingent terms are analyzed remedies for breach and the opportunity for renegotiation the existence of both is demonstrated to induce parties to behave approximately as they would under detailed contracts

the determinants of contract length an empirical analysis based on canadian micro data abstract recent theoretical work on the determinants of wage contract length focuses on inflation uncertainty as an explanatory variable additional to the more traditional variable of transactions costs this paper analyses the empirical determinants of contract duration using a large sample of contract data and confirms the conclusions reached in the theoretical literature

cities scale economies local goods and local governments this study utilises a precise diagrammatic exposition to analyse issues involving the existence and stability of cities land rents and private and public local finance in spite of the limitations of the exposition such as having only two dimensions the model is very general primarily due to the use of cost curves in the analysis the main new results of this study are 1 a generalisation of the henry george law in its extended form this law expresses the sufficiency of land rents for the financing of efficient local government investments in local public goods pure or not piguvian subsidies and taxes and in the internalisation of external economies of scale except for the case of natural monopoly cities for this study a further extension has been made to apply to an economy with many different population groups industries cities and production factors 2 that when the basic industry of a city has scale economies internal to the individual firm the optimal local government policy is

uncertainty and labor contract durations this paper provides an empirical investigation into the relationship between ex ante u s labor contract durations and uncertainty over the period 1970 to 1995 we construct measures of inflation uncertainty as well as aggregate nominal and real uncertainty the results not only corroborate previous findings of an inverse relationship between contract durations and inflation uncertainty but also document that this relationship extends to both measures of aggregate uncertainty we also explore the robustness of this relationship to various measures of inflation uncertainty that have appeared in the literature

inflation uncertainty and contract duration this study examines the determinants of the duration of u s union contracts using a longitudinal contract data base support is found for the hypotheses that 1 inflation uncertainty reduces contract length and that 2 greater contracting costs as proxied by a strike variable and by previous duration increase contract length in addition contract duration is found to be greater for indexed contracts to be procyclical and to have increased over the sample period copyright 1989 by mit press

strategic bargaining models and interpretation of strike data attrition screening and signalling models of strategic bargaining are characterized in terms of their predictions about the incidence mean duration and settlement rates of strikes and the terms of wage settlements these predictions are compared with the general features observed in empirical studies of strikes in canada and the united states conclusions are drawn about the types of models capable of generating these features and about the conformity of the models to the evidence methods are described for computing the numerical examples used to illustrate the models

a risk sharing view of real wages and contract length this paper models a union and firm choosing between long labor contracts in which wages are predetermined and short contracts in which wages are flexible it is shown that the union strictly prefers short contracts because it dislikes the greater employment volatility in long contracts in contrast the convexity of the firm s profit function leads the firm to prefer the greater uncertainty of long contracts the model predicts that workers are prepared to enter long contracts only if they are compensated with a higher real wage this prediction is tested using a large sample of canadian collective agreements with generally supportive results

costs of adjustment and the spatial pattern of a growing open city this paper investigates the effect of costs of adjustment on the dynamic characteristics of intra urban resource allocation the analysis is concentrated on the development pattern of an open city within a system of many cities both in steady state and in variable state economies competitive equilibrium of the urban system as a whole is also discussed and compared to pareto optimum allocation some of the results that characterize the resource allocation under static analysis are reestablished for the dynamic case as well but others that follow from comparative statics are shown to be incorrect under the dynamic analysis

long term contracts expectations and wage inertia abstract this paper develops a macro model of contractual wage setting that is used to test the importance that increased contract length has in generating wage inertia using an errors in variables format to isolate the effect of price and productivity shocks it is shown that the sensitivity of union wages to unanticipated disturbances would increase by only a small amount in the absence of long term three year labor contracts our results suggest that formal contracts are not a major source of nominal wage rigidity and the price surprises play a relatively small role in generating business cycles

clubs in an urban setting abstract in this paper the properties of a congestable concentrated local public good ccolpg are described taking into account both locational aspects and congestion this discussion therefore completes the analysis of congestable local public goods lpg which was started in our earlier paper congestable local public goods in an urban setting j urban econ 290 310 1982 it is here shown that the optimal provision of ccolpg leads to the creation of clubs where the government has to determine the location and provide the optimal quantity of lpg in each club and also levy congestion tolls on users according to their level of utilization of the club congestion tolls cover the est part of the costs where is the level of congestability of the ccolpg the rest of the costs are covered by taxing land rents clubs will form possibly more than one per city even if the lpg is pure i e 0 and they will contain a single household if the lpg is private i e 1 the difference between these results and those of classical club theorists stem from the fact that here we also take into account the limited supply of land of given accessibility i e locational aspects which like congestion lead to the creation of clubs when these two factors are considered together it explains why congestion tolls alone are not sufficient to finance clubs operations or why pure lpgs also have to be provided locally etc

wage rigidity collective bargaining and the minimum wage evidence from french agreement data using several unique data sets on wage agreements at both industry and firm levels in france we document stylized facts on wage stickiness and the impact of wage setting institutions on wage rigidity first the average duration of wages is a little less than one year and around 10 percent of wages are modified each month by a wage agreement data patterns are consistent with predictions of a mixture of calvo and taylor models the frequency of wage change agreements is rather staggered over the year but the frequency of effective wage changes is seasonal the national minimum wage has a significant impact on the probability of a wage agreement and on the seasonality of wage changes negotiated wage increases are correlated with inflation the national minimum wage increases and the firm profitability

land rents optimal taxation and local fiscal independence in an economy with local public goods abstract a general equilibrium model of an economy with cities farms and free migration of population is constructed the cities produce internationally traded goods via production functions subject to economies of scale they also produce housing and a local public good two areas are defined to be disjoint if households performing an economic activity in one area are not operating in the other an area is exclusive if it is disjoint to its complement the economic surplus of an area is then defined to be the value of the area s net export of goods and resources local efficiency of an area is defined to be a state in which its economic surplus attains its maximum value this state is proved to be a necessary condition for pareto optimality of the economy it is then proved that beside piguvian corrective taxes the only taxes necessary and sufficient to finance local government activities efficiently are taxes on land rents furthermore if jurisdiction of a local government is over an exclusive area no intervention of central government is necessary and local authorities can be fully autonomous if the economy can be divided into pairwise disjointed exclusive areas those areas are optimal jurisdictions in the sense that efficiency in the economy can be achieved with local authorities only

the effects of real and nominal shocks on union firm contract duration abstract the first theoretical works on labor contract length gray 1978 for example emphasized the existence of a negative relation between contract duration and uncertainty in estimating a linear version of gray s contract length model and an alternative model developed by christofides and wilton our empirical results indicate little evidence of a negative relationship between length and uncertainty in the united states furthermore our findings indicate the presence of significant differences across industries at the two digit sic level in the response of bargain duration to uncertainty

perennial crop supply response a kalman filter approach a state space model for perennial crop supply response is developed new plantings and removals depend on the existing age structure of the crop and expected values for future prices and other exogenous variables acreage in individual age categories evolves depending upon existing acreage new plantings and removals the kalman filter and an iterative parameter search provide maximum likelihood estimates of the unknown parameters and age group acreages from observed data on total acreage and production an empirical application for alfalfa shows that existing acreage has differential impacts on new plantings and removals depending upon age

work effort and contract length contracts of deterministic duration are derived as solutions to a moral hazard problem in a framework that extends e fama s 1980 single period labor contracts model by introducing recontracting costs and long term contracts a worker can be induced to put forth unobservable effort if he knows that his wages in future contracts will be related to his past overall productivity as contract length is increased the worker is more likely to shirk because the present value of future wage revisions associated with shirking is reduced the optimal contract length minimizes the sum of explicit contracting costs and the costs of shirking copyright 1988 by the london school of economics and political science

the determinants of strike incidence and severity a micro level study this paper investigates the determinants of strike incidence and severity during labor contract negotiations the author develops a model that considers the forces influencing both unions willingness to strike and employers willingness to take a strike and estimates it using data describing 1 050 negotiations in u s manufacturing during the 1971 80 period the results indicate that strike incidence is influenced by the gender composition of the labor force demand fluctuations in the product market location in a right to work state the number of workers in the bargaining unit union density in the industry and the extent to which wages kept pace with inflation over the prior contract period on the other hand neither the local unemployment rate when negotiations began nor the inflation rate over the term of the expiring contract influenced strike incidence or severity in this sample