College of Behavioral & Social Sciences

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Author: search.filters.author.Tracy, Joseph

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    Unions, Bargaining and Strikes
    (Edward Elgar, 2002-08-25) Cramton, Peter; Tracy, Joseph
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    The Effect of Collective Bargaining Legislation on Strikes and Wages
    (MIT Press, 1999) Cramton, Peter; Gunderson, Morley; Tracy, Joseph
    Using Canadian data on large, private-sector contract negotiations from January 1967 to March 1993, we find that strikes and wages are substantially influenced by labor policy. The data indicate that conciliation policies have largely been ineffective in reducing strike costs. In contrast, general contract reopener provisions appear to make both unions and employers better off by reducing negotiation costs without systematically affecting wage settlements. Legislation banning the use of replacement workers appears to lead to significantly higher negotiation costs and redistribution of quasi-rents from employers to unions.
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    ESOP Fables: The Impact of Employee Stock Ownership Plans on Labor Disputes
    (2005-09) Cramton, Peter; Mehran, Hamid; Tracy, Joseph
    By the early 1990s employee stock ownership plans (ESOPs) had become more prevalent in unionized firms than in nonunionized firms. However, little research has been devoted to examining the implications of ESOPs for collective bargaining. Ben-Ner and Jun (1996) model ESOPs as a buyout option for the union. The ownership share of the typical union ESOP, though, is significantly below 50%. In this paper, we extend the signaling model of Cramton and Tracy (1992) to allow partial ownership stakes by the union. We demonstrate that ESOPs create incentives for unions to become weaker bargainers. As a result, the model predicts that ESOPs will lead to a reduction in the fraction of labor disputes that involve a strike. We examine these predictions using U.S. bargaining data from 1970-1995. The data suggest that ESOPs do increase the efficiency of labor negotiations by reducing dispute rates and shifting the composition of disputes from more costly strikes. Consistent with improved bargaining efficiency, we find that the announcement of a union ESOP leads to a 50% larger stock market reaction as compared to the announcement of a nonunion ESOP.