included the word kompromiss. In the remaining cases, we have based coding on a comparison between the original demands put forward by the initiator of the conflict and the stated result. For example, when saw mill workers in Luleå in 1917 received a 10 percent wage increase after having demanded a 20 percent increase we have classified it a compromise. 4 1907-1927 On average for the whole period, 41 percent of the work stoppages end in a compromise. As seen in figure 5, there is a positive long-term trend of compromise outcomes in strikes, similar to United States in the same period (Geraghty & Wiseman, 2011, p. 521), but with a clear difference: the level of compromises, both in the beginning and end of the period, was considerably higher in Sweden (in most years by 10-20 percentage points). This adds to the evidence suggesting that Sweden was well on its way in the transition to a state of the world where conflicts can be described as pure games. Not all countries developed in this direction. In Canada, the share of compromise outcomes fell from over 40 percent in the period 1901-1914 to about 23 percent in the period 1920 to 1934 (Huberman & Young, 2002, p. 339). The depression of 1920-22 stands out in the figure. The downturn is associated with the end of the First World War and deflationary pressure and has been described as one of the larger crisis in Swedish economic history (Schön, 2010). GDP fell an enormous 5 percent by 1921 with exports, investment and industrial production being the components most affected. In 1921 the economic downturn was accompanied by a tougher situation on the labor market as we see a marked drop in the share of compromises. However, as the 1920s progressed and the economy was brought back on track, the previous higher share of compromises were restored. In 1927, about half of the work stoppages ended in a compromise outcome.
Observations 4,752 4,752 4,752 4,752 4,752 4,752 R-squared 0.107 0.074 0.076 0.108 0.075 0.079 Cragg-Donald Wald F-stat (1st stage) 95.398 49.06 44.564 36.35 36.348 33.23 Year FE YES YES YES YES YES YES County FE NO YES YES NO YES YES Industry FE NO NO YES NO NO YES Table 4. IV estimates for mediation on compromise outcomes Note: Standard errors are in parenthesis *** p<0.01, ** p<0.05, * p<0.1 5.3 Placebo-effects of mediation A potential concern is that the geographical instrument of mediation is picking up some unobservable factor that drives compromises and is spuriously correlated with the mediator’s location. To try to address this issue, we construct a placebo sample of work stoppages utilizing the fact that the collection of statistics of work stoppages in Sweden began in 1903, thus four years before the institution of mediation was introduced. In this placebo sample, we have geocoded all locations of work stoppages taking place between 1903 and 1907. We have also added a placebo-treatment of mediation by constructing dummies measuring the log of distance to the mediators of 1907’s residency. If our instrument is really picking up the causal effect of mediation, we would not expect to see any significant correlation between the placebo-treatment and the compromise dummy before the institution was actually put in place. The rationale for the placebo control is thus to test that the instrument really captures the effect of mediation, rather than some unobservable factor correlating with mediators location. In table 5 we show the regressions of the “placebo distance” dummy and the work stoppages 1903-1906. Similarly, we add a placebo dummy for whether the stoppage took place at the location of a future mediator’s residency. All specifications include the same variables as our baseline regression, including controls for year, industry and geography. In column 1, the correlation between the distance to the mediator and the compromise dummy is positive and insignificant for 1903-1906. Since the placebo mediation covers the four closest proceeding years to the initiation of the mediator’s office, be also add the