The fact that settlement rates are much higher, where final-offer arbitration rather than conventional arbitration is the dispute settlement procedure, is used as the basis of a test of the role of divergent and relatively optimistic expectations in causing disagreement in negotiations. Calculations of identical-expectations contract zones using existing estimates of models of arbitrator behavior yield larger identical-expectations contract zones in conventional arbitration than in final-offer arbitration. This evidence clearly suggests that divergent expectations alone are not an adequate explanation of disagreement in labor-management negotiations. A number of alternative explanations for disagreement are suggested and evaluated.

A general model of arbitrator behavior in conventional and final-offer arbitration is developed that is based on an underlying notion of an appropriate award in a particular case. This appropriate award is defined as a function of the facts of the case independently of the offers of the parties. In conventional arbitration the arbitration award is argued to be a function of both the offers of the parties and the appropriate award. The weight that the arbitrator puts on the appropriate award relative to the offers is hypothesized to be a function of the quality of the offers as measured by the difference between the offers. In final-offer arbitration itis argued that the arbitrator chooses the offer that is closest to the appropriate award.The model is implemented empirically using data gathered from practicing arbitrators regarding their decisions in twenty-five hypothetical cases. The estimates of the general model strongly support the characterizations of arbitrator behavior in the two schemes. No substantial differences were found in the determination of the appropriate award implicit in the conventional arbitration decisions and the determination of the appropriate award implicitin the final-offer decisions.

A general model of arbitrator behavior in conventional and final-offer arbitration is developed that is based on an underlying notion of an appropriate award in a particular case. This appropriate award is defined as a function of the facts of the case independently of the offers of the parties. In conventional arbitration the arbitration award is argued to be a function of both the offers of the parties and the appropriate award. The weight that the arbitrator puts on the appropriate award relative to the offers is hypothesized to be a function of the quality of the offers as measured by the difference between the offers. In final-offer arbitration it is argued that the arbitrator chooses the offer that is closest to the appropriate award. The model is implemented empirically using data gathered from practicing arbitrators regarding their decisions in twenty-five hypothetical cases. The estimates of the general model strongly support the characterizations of arbitrator behavior in the two schemes. In addition, no substantial differences were found in the determination of the appropriate award implicit in conventional arbitration decisions and the determination of the appropriate award implicit in the final-offer decisions.

U.S. income inequality has varied inversely with union density over the past 100 years. But moving beyond this aggregate relationship has proven difficult, in part because of limited microdata on union membership prior to 1973. We develop a new source of microdata on union membership dating back to 1936, survey data primarily from Gallup (N ≈ 980,000), to examine the long-run relationship between unions and inequality. We document dramatic changes in the demographics of union members: when density was at its mid-century peak, union households were much less educated and more nonwhite than other households, whereas pre-World War II and today they are more similar to nonunion households on these dimensions. However, despite large changes in composition and density since 1936, the household union premium holds relatively steady between 10 and 20 log points. We use our data to examine the effect of unions on income inequality. Using distributional decompositions, time series regressions, state-year regressions, as well as a new instrumental-variable strategy based on the 1935 legalization of unions and the World War II–era War Labor Board, we find consistent evidence that unions reduce inequality, explaining a significant share of the dramatic fall in inequality between the mid-1930s and late 1940s.

We summarize findings from an audit study investigating how unemployment duration, age, and holding a low-level “interim” job affect the likelihood that experienced college-educated females applying for administrative support jobs receive a callback from potential employers. The results show no relationship between callback rates and unemployment duration. In contrast, workers age 50 and older and workers with an “interim” job are significantly less likely to receive callbacks. We also summarize disparate findings in the growing literature of resume-based audit studies of career histories, and discuss avenues in which the literature could achieve results that are more comparable and externally valid.

Unemployment Insurance benefit durations were extended during the Great Recession, reaching 99 weeks for most recipients. The extensions were rolled back and eventually terminated by the end of 2013. Using matched CPS data from 2008-2014, we estimate the effect of extended benefits on unemployment exits separately during the earlier period of benefit expansion and the later period of rollback. In both periods, we find little or no effect on job-finding but a reduction in labor force exits due to benefit availability. We estimate that the rollbacks reduced the labor force participation rate by about 0.1 percentage point in early 2014.

We use a résumé audit study to investigate the role of employment and unemployment histories in callbacks to job applications. We find that applicants with 52 weeks of unemployment have a lower callback rate than those with shorter spells. There is no relationship, however, between spell length and callback among applicants with spells of 24 weeks or less. We also find that both younger and older applicants have a lower callback probability than prime-aged applicants. Finally, we find that applicants who are employed at the time of application have a lower callback rate than do unemployed applicants.

Orley Ashenfelter, Janet Currie, Henry S. Farber, Matthew Spiegel, An Experimental Comparison of Dispute Rates in Alternative Arbitration Systems, Econometrica, Vol. 60, No. 6 (Nov., 1992), pp. 1407-1433