This paper outlines the construction of a new panel data set of U.S. contract negotiations and strike activity. This is the first to contain data on both strikes and contract expirations. Key findings are that 15 percent of scheduled negotiations end as strikes, but strike probabilities are higher in June and lower in December; the variability, and not the level, of firm profitability affects strike activity; personal characteristics of the union workforce affect strike activity; and strikes are more likely when the local labor market is tight, but less likely when the industry labor market is tight.

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.