Holdouts (the continuation of negotiations beyond the contract expiry date) are the most common form of disputes in labor contract negotiations. We model holdouts as a delaying tactic employed by unions to obtain information about other bargaining outcomes in their industry. Novel implications of our model include a positive association between holdout duration and the number of bargaining pairs negotiating contracts simultaneously; bunching of holdout durations within these "negotiating groups"; and fewer strikes among holdouts which end later in groups. Using a large panel of contract negotiations in Canadian manufacturing, we find considerable support for these predictions.

When union‐firm pairs bargain sequentially, and when unobserved components of firms' abilities to pay are subject to correlated shocks, unions that bargain later in a sequence can acquire valuable information by observing previous bargaining outcomes in their industry. We derive the implications of this kind of learning in an asymmetric information model of wage negotiations and argue that the most robust implication is a lower incidence of strikes among “followers” than “leaders” in wage negotiations. Considerable empirical support for this implication is found in a long panel of Canadian contract negotiations.

Most OECD economies, including that of Canada, experienced a slowdown in economic growth from the 1961–1973 period to the 1973– 1988 period, and to the 1988–1995 period. Consequently, progress in the standard of living, as measured by GDP per capita, also slowed down in most OECD countries over the three subperiods. This paper analyses the sources of output growth in 122 industries and in the private business sector to gain an additional perspective on the slowdown of the Canadian economy. We adopt the constant-quality indexes of capital and labor inputs introduced by Dale W. Jorgenson and Zvi Griliches (1967) and later used extensively in Jorgenson et al. (1987), Jorgenson (1995a, b), and Jorgenson and Eric Yip (2000) to identify the sources of growth. These measures allow us to take into account the changing composition of the labor force and the capital stock. At the industry level, we adjust for capital quality by aggregating the capital stock across five asset types by means of the rental prices of capital rather than the asset prices of capital. The use of rental prices allows us to incorporate differences in depreciation rates and tax treatment across different asset types for each industry. At the same time, we combine hours worked by each type of worker using the share of labor compensation to reflect labor quality. At the aggregate level, we apply the same framework by aggregating the capital stock across different asset types and hours worked across different types of workers. A number of studies have compared Canada’s economic growth performance with that of its competitors using this framework (Chrysostom Dougherty, 1991; Dougherty and Jorgenson, 1997; Jorgenson and Yip, 2000). However, this is the first attempt at using this framework to assess Canada’s economic performance at the industry level.

Holdouts (the continuation of negotiations beyond the contract expiry date) are the most common form of disputes in labor contract negotiations. The authors model holdouts as a delaying tactic employed by unions to obtain information about other bargaining outcomes in their industry. Novel implications of their model include a positive association between holdout duration and the number of bargaining pairs negotiating contracts simultaneously; bunching of holdout durations within these 'negotiating groups'; and fewer strikes among holdouts which end later in groups. Using a large panel of contract negotiations in Canadian manufacturing, the authors find considerable support for these predictions. Copyright 1998 by American Economic Association.

This paper provides a consistent international comparison of the patterns of growth in Canadian and U.S. industries. While much previous work has been done comparing sectoral (total factor) productivity in these two countries, the methods are not entirely comparable. Our approach here is to use methods and definitions that are almost identical for the two countries and therefore to provide a better sense of the relative productivity performance of the two countries. Our methodology for international comparisons of growth in output, inputs, and productivity is based on the economic theory of production. We use measures of labor and capital that take into account the changing composition of the labor force and capital stocks (relatively more educated and older workers, and relatively more equipment compared to structures). We find that, during the 1961–1973 period, Canadian industries were able to bring their productivity levels closer to U.S. levels, and they also had a higher rate of output growth. However, the growth in output and productivity slowed down after 1973 in both countries. As a result, the gap in the level of productivity between the Canadian and U.S. industries has remained virtually unchanged since 1973. Looking closely at the sources of industrial output growth, we find that input growth is the predominant source of the growth for almost all industries in the two countries over the 1961– 1995 period. Productivity growth contributes, on average, only about 20 percent of the growth of industrial output in the two countries over this period.