The Effect of Union Financial Strength and Liquidity on Strike Propensities

Abstract

Union financial strength and liquidity, though long recognized as significant factors in collective bargaining, have been commonly missing from most recent bargaining/strike models and empirical tests of strike propensities. This paper examines the role of union funds in several prominent bargaining and strike models, derives predictions and tests these hypotheses with a sizable micro~data set. In particular we examine whether the unusual liquidity of union assets is systematically related to strike propensities. Our findings are that union funds have an impact on the likelihood of a dispute and that union liquidity is positively related to strike propensity. (JSO, J52)