Cornell University ILR School
DigitalCommons@ILR
Faculty Publications - Human Resource Studies Human Resource Studies
January 2002
‘When Unions Mattered': Assessing the Impact of
Strikes on Financial Markets: 1925-1937
John Dinardo
University of Michigan
Kevin F. Hallock
Cornell University, kfh7@cornell.edu
Follow this and additional works at: http://digitalcommons.ilr.cornell.edu/hrpubs
Thank you for downloading an article from DigitalCommons@ILR.
Support this valuable resource today!
This Article is brought to you for free and open access by the Human Resource Studies at DigitalCommons@ILR. It has been accepted for inclusion in
Faculty Publications - Human Resource Studies by an authorized administrator of DigitalCommons@ILR. For more information, please contact
hlmdigital@cornell.edu.
‘When Unions Mattered': Assessing the Impact of Strikes on Financial
Markets: 1925-1937
Abstract
This examination of the Stock Market’s responsiveness to strikes looks specifically at strike actions that labor
historians generally view as the major ones occurring in the United States in the years 1925–37. The authors
find that strikes had large, negative effects on industry stock value. Longer strikes, violent strikes, strikes in
which unions “won,” industry-wide strikes, strikes that led to union recognition, and strikes that led to large
wage increases were associated with larger negative share price reactions than were other strikes. Much of the
“news” generated by the typical strike seems to have been registered by the Stock Market very early in the
strike. However, there were also some fairly large stock price reactions to news that could be fully revealed
only at the end of a strike.
Keywords
union, strike, market, labor, industry, wage, stock, economic, work, price
Comments
Suggested Citation
Dinardo, J. & Hallock, K. (2002).'When unions mattered': Assessing the impact of strikes on financial
markets: 1925-1937. Industrial and Labor Relations Review, 55, 219-233.
http://digitalcommons.ilr.cornell.edu/hrpubs/13
Required Publisher Statement
Posted with permission from the Industrial and Labor Relations Review.
This article is available at DigitalCommons@ILR: http://digitalcommons.ilr.cornell.edu/hrpubs/13
219
Industrial and Labor Relations Review, Vol. 55, No. 2 (January 2002). © by Cornell University.
0019-7939/00/5502 $01.00
T
WHEN UNIONS “MATTERED”: THE IMPACT OF
STRIKES ON FINANCIAL MARKETS, 1925–1937
JOHN DINARDO and KEVIN F. HALLOCK*
This examination of the Stock Market’s responsiveness to strikes looks specifically
at strike actions that labor historians generally view as the major ones
occurring in the United States in the years 1925–37. The authors find that
strikes had large, negative effects on industry stock value. Longer strikes,
violent strikes, strikes in which unions “won,” industry-wide strikes, strikes that
led to union recognition, and strikes that led to large wage increases were
associated with larger negative share price reactions than were other strikes.
Much of the “news” generated by the typical strike seems to have been registered
by the Stock Market very early in the strike. However, there were also some fairly
large stock price reactions to news that could be fully revealed only at the end
of a strike.
*John Dinardo is Professor of Economics and Public
Policy, University of Michigan, and Kevin F. Hallock
is Associate Professor of Economics and of Labor and
Industrial Relations, University of Illinois at UrbanaChampaign.
The authors thank Orley Ashenfelter,
Sherrilyn Billger, Dale Belman, Richard Block, Kevin
Denny, Benjamin Gordon, Wallace Hendricks, Margaret
Chaplan, Mark Moore, Larry Neal, Martin
Wagner, and participants at the Ninth Bargaining
Group Conference at Michigan State University for
discussions and suggestions. Matthew Artz and Xiang
Yi provided excellent research assistance. For financial
support, the authors thank the Institute of Labor
and Industrial Relations at the University of Illinois.
They are also extremely grateful to Margaret Chaplan
and Katie Dorsey from the Industrial Relations Library
at the University of Illinois for their help in
identifying and locating data.
his paper is an examination of the
impact of important strikes on industry
stock returns at a time when unions
were rapidly evolving. We focus on the
economic consequences of strikes during
the interwar period as reflected in the behavior
of the stock market. Our point of
departure is the identification of strikes
that, in contrast with most present-day
strikes, were primarily an attempt by workers
to change the “terms of trade” between
workers and their employers. Using standard
event-study methods, we evaluate the
effect of various important strike characteristics
on broad industry-level measures
of equity prices. While several studies (for
example, Becker and Olson 1986; Neumann
1980; Kramer and Vasconcellos 1996; Persons
1995) have investigated the link between
strikes and stock prices, they have
focused on a much more recent period—
one for which data are publicly available—
and the strikes they have examined arguably
had a much smaller impact on the
structure of industrial relations than did
the strikes in our sample.
220 INDUSTRIAL AND LABOR RELATIONS REVIEW
Given our focus on strikes, our paper is
directly related to two literatures. In one
(see Neumann and Reder 1984), the effect
of strikes on industry-wide output is measured
using industry-wide measures such as
inventories and shipments. In another, the
lost value associated with strikes is measured
using data on market valuation (see,
for example, Ruback and Zimmerman
1984). This literature is closely related to
the “event study” literature in finance and
has focused exclusively on using stock market
returns from individual firms. At its
most basic level, our approach is a combination
of these two approaches. Like the
firm-level studies, our study uses information
from the capital markets; unlike that
literature, but in common with the literature
on the “industry-wide” effect of strikes,
our study focuses on broadly defined industrial
aggregates.
Our study, therefore, begins with the
premise that the extent of union effects is
potentially easier to detect when changes
in unionization are large and important
than when they are modest. Toward that
end, we focus on the period between the
two World Wars, an important time for the
U.S. labor movement. After witnessing a
prodigious and rapid increase in membership
at the end of the nineteenth century,
American unionism experienced a decline
of almost equal magnitude in the period
leading up to the first World War. The
ferocity of business and government hostility
to the attempt to organize American
workers left little doubt about the importance
of the struggle. As we will argue
below, this period and the period leading
up to World War II provide a unique time to
investigate the impact of strikes on firms.
Analytical Framework
At first glance, it might be surprising to
find any effect of strike activity on industrywide
stock prices. The first puzzle involves
why strikes should have any effect on the
returns of individual firms. In the context
of an infinitely long-lived firm, and when
strikes have no effect on the terms of trade,
the change in the value of discounted earnings
streams would be quite small. Given
the considerable evidence that the measured
change in market values of firms
resulting from strikes is not negligible (for
example, Becker and Olson 1986; Neumann
1980; Ruback and Zimmerman 1984), however,
we follow the earlier literature and
assume that it is meaningful to investigate
the presence of such an effect.
Once we turn our attention away from
the single firm and consider the entire
industry, we must consider the effect of
union bargains on non—unionized firms
or those not immediately party to the contract
negotiations.1
One’s a priori view of
the sign and magnitude of these indirect
effects depends on the mechanism by which
unions (in this historical context) raise
wages. If a “successful” strike is one resulting
in a one-time “permanent” change in
the share of the surplus going to workers,
the strike’s effect on the value of the firm
will be proportional to the change in profits
going to the firm. The effect on industrial
activity at large will be small to the
extent that the strike’s effects are limited
exclusively to the struck firm and the firm’s
share of output is small.
To prepare the way for our empirical
analysis, consider the extreme case in which
wage bargains reached by unions accrue to
all workers in an industry.2
Again for simplicity,
we assume a constant real rate of
interest r. Before the strike, the industry
faces a probability π of a one-time permanent
change in firm value due to the union
calling a strike and winning.3
If we denote
earnings in a given time period by D and
the percentage change in the share going
to the firm by –δ, the value of the firm prior
to the strike decision is
1
See Lazear (1983) for some of the subtleties in-
volved.
2
The presentation could be made more realistic by
considering a finite time horizon or the possibility of
future union wins or losses, but this would merely
complicate the expressions without contributing additional
insight.
3
1 – π, then, is the probability that the union does
not call a strike or calls one and loses.
IMPACT OF STRIKES ON FINANCIAL MARKETS, 1925–1937 221
(1) E[V0
] = π∫0
∞
e–rt
D(1 – δ)dt +
(1 – π)∫0
∞
e–rt
Ddt
If the union strikes and wins, the value of
the firm is merely
(2) Vunion strikes and wins
= ∫0
∞
e–rt
D(1 – δ)dt
The percentage change in the value of the
firm (or log difference) when the union
wins is then given by
(3) Percent change in
the value of the firm =
log(E[V0
]) – log(Vunion strikes and wins
)
= log (
1 – δπ
)
≈ (1 – π)δ
This expression has a simple interpretation.
The percentage change in the value
of the firm when the union strikes and wins
an important fight is equal to the product
of the probability that the union loses or
does not strike at all (1 – π) and the fraction
of earnings that flow away from shareholders
toward workers (δ). If firms completely
anticipated a union strike and victory (π =
1) and this information were already incorporated
into the value of the firm, a strike
would have no effect on excess returns.
The analysis is completely symmetric for
the case in which the union does not strike
or strikes and loses. In this case, the magnitude
of the measured effect of union losses
on stock prices will be largest when the
probability firms attach to a union loss is
small. The measured effect of a union loss
on stock returns will be small whenever a
union defeat is likely. Put differently, the
revision to stock prices depends not only
on the direct effect of the union loss (or
other event) on the firm’s “bottom line”
(δ) but also on how surprising the event is
(π).
We focus on the relationship between
strikes and industry stock prices during the
period between the World Wars because
this is a time viewed as very important in
labor history by labor historians and other
informed observers. Nevertheless, it is interesting
to compare our results with those
of studies using data from a much more
recent time period. Several such studies
are noteworthy. Becker and Olson (1986),
in a comprehensive study of the impact of
strikes on individual firm stock prices from
1962 to 1982, found that the average large
strike was associated with a 4.1% decline in
stock prices.4
Persons (1995) found that
the share price reaction to struck automobile
producers and steel suppliers was
around 1.6% on the days around the strike.
Neumann (1980) found a share price reaction
of about 0.5% on the day of an announced
strike for a sample of firms struck
in the late 1960s and mid-1970s.5
Using
Canadian data, Nelson et al. (1994) studied
124 strikes between January 1983 and July
1989 and found a loss in stock price of
about 1% for the 5-day window around the
strike.6
Although each of these studies
used a different time period, sample of
strikes, and event window, they all suggest a
negative share price reaction of between
1% and 4% around the start of the strike.
A goal of our work is to assess the impact
of strikes on industry stock prices during
the interwar period. As a practical matter,
the most straightforward way to do so would
be merely to examine industry stock returns
before and after the strike and then
attribute the entire stock price change to
the effects of the strike. The problem with
such a comparison is that it implicitly assumes
that had the strike not occurred, industry
returns after the strike ended would
have been exactly equal to industry returns
just before the strike—an assumption that
is justifiable only in the improbable case
that general economy-wide conditions were
1 – δ
4
The Center for Research in Security Prices (CRSP)
at the University of Chicago only published daily
stock prices after 1962. All of the previous studies
concentrated on years after this date.
5
Neumann (1980) went on to suggest that the
stock market seems to have predicted the occurrence
of strikes quite well during this period.
6
Also see Kramer and Vasconcellos (1996),
Davidson et al. (1988), and Ruback and Zimmerman
(1984) for related studies.
222 INDUSTRIAL AND LABOR RELATIONS REVIEW
unchanging during the strike period. A
more realistic analysis generates an assessment
of the movement of stock prices that
would have occurred in the absence of the strike.
This counterfactual can then be compared
to the actual behavior of stock prices to
generate an estimate of the strike’s effect.
One approach to making such a comparison,
and the one we use in this paper, is
often referred to as “the event study
method.” It has been widely used in industrial
relations research, including, for example,
Becker and Olson (1986) and
Abowd, Milkovich, and Hannon (1990). As
the technical aspects of the method we
employ are carefully described in Brown
and Warner (1985), Campbell, Lo, and
MacKinlay (1997), Fama et al. (1969), and
MacKinlay (1997), we will describe the basic
ideas only briefly.
We begin by concentrating on the effect
of a strike around the strike’s start. Cumulative
average excess returns are calculated
using the simple method outlined below.
Let t index time in trading months, let s
indicate the “event month” (the month of
the start of the strike), and let i indicate
industries. First the industry monthly stock
return, Rit
, is regressed on Rmt
, the average
market return for month t, which we also
collected from the Cowles (1938) data. This
regression,
(5) Rit
= αi
+ βi
Rmt
+ ηit
,
is estimated for a period7
from month s – 24
to month s – 12. The coefficients from this
regression, as well as the values of Rmt
during
the strike period, allow us to generate
an estimate—Rˆ
it
—of what would have happened
had the strike not occurred, where
(6) Rˆ
it
= αˆi
+ βˆ
i
Rmt
,
and where αˆi
and βˆ
i
are OLS estimates of
the parameters in equation (5) and Rˆ
it
is
merely the predicted return. Our reason
for estimating this regression using data for
a period preceding the strike is to avoid
potential contamination of our counterfactual
by expectations of a strike.
With our estimates of the counterfactual
in hand, the next step is to compute the
following for each month around the event
date:
(7) ERit
= Rit
– Rˆ
it
,
where ERit
(usually called the “excess return”)
for each industry i for each month t
is merely the difference between the actual
return Rit
and the predicted return Rˆ
it
. In
the absence of a strike, the average of ERit
should clearly equal zero.
The excess returns calculated for each
month around the start of a strike are used
to form the average excess returns for each
strike. These are easily computed by averaging
the monthly excess returns for each
strike. We also compute “cumulative” excess
returns by adding monthly excess returns
for various intervals (called event
“windows”) around the date of the strike.
Cumulative average excess returns are
merely the average of these cumulative excess
returns across all strikes.
The precise statistic used to assess
whether average excess returns or cumulative
excess returns are “statistically significant”
are discussed in Campbell, Lo, and
MacKinlay (1997). These tests proceed by
observing, as noted previously, that average
excess returns and cumulative average
excess returns should be zero in the absence
of “news” that permanently alters the
value of the firm. The extent to which these
returns differ from zero is evidence in support
of the hypothesis that the events we
have identified provided important news.
Another issue is the definition and timing
of the event. In the typical event study,
where excess returns over a period of a few
days are being evaluated, defining the timing
of the event is critically important and
often very difficult. Researchers must be
able to carefully identify when participants
in capital markets first became aware of
news. We are not as concerned with this
issue, since our periods are measured in
months. Other implications of the timing
are discussed below.
7
We tried other prediction periods with no meaningful
effect on the results.
IMPACT OF STRIKES ON FINANCIAL MARKETS, 1925–1937 223
Historical Context
As mentioned in the introduction, the
interwar period is a particularly interesting
one for an investigation of this kind. The
state policy vis-a-vis unionism was either
nonexistent or hostile during most of the
sample period. Moreover, it is clear that
most participants firmly believed that the
outcome of the battle between capital and
labor was of great significance and the immediate
stakes were enormous. For example,
in the decades leading up to our
sample period the Industrial Workers of
the World began as “the last important
national organization to challenge the philosophy
of business unionism … [but by the
end of World War I had become] a tiny
organization whose status as a labor union
was questionable” (Rees 1977). Moreover,
it is quite clear (particularly for years before
1934) that “unions existed in a predominantly
non-institutionalized setting.
Union recognition, collective bargaining
and labor-management contractual agreements
were not yet legal and, in fact, much
of the conflict between labor and capital
was over the right to organize” (Rubin
1986). At the same time, the government’s
attempts to avert strikes that might
damage wartime production and other
concerns led to the passage of the Clayton
Act. The Clayton Act abolished the legal
framework that had most limited union
organizing—the principle that unions
violated the Sherman Anti-Trust Act by
acting as a “restraint on trade.”8
As a
consequence, the interwar period was
arguably the crucible that set the terms
of trade under which unions would be
tolerated by business and the government
after World War II. As such, it is an
ideal context in which to study the impact
of strikes on stock prices.
In addition, unlike in the post–World
War II period, the role of the state in providing
income support (sometimes viewed
as an “alternative” to unionism) was rather
small. Moreover, the institutional features
that were to mark postwar industrial relations,
such as “pattern bargaining,” were
forged in part during this critical period.
The formation of industrial relations
schools reflected a perception that collective
bargaining was a relatively permanent
phenomenon. In contrast, during the interwar
period the view of collective bargaining
as “normal” or “inevitable” was not
widespread. The absence of such a view was
reflected in the nature of the strikes, which
generally were driven by debates over fundamental
aspects of workplace relations.
Data
The two main data sources for this paper
are the information on the specific strikes
and industry financial data. The first set of
data come from Filippelli (1990), a history
of significant strikes from the relevant time
period. The stock price data are from a
Yale University report (Cowles 1938). In
each case, collecting the data required going
through the sources by hand (or using
scanning technology along with Optical
Character Recognition [OCR] software).
We investigated a broad set of possible
sources of data on strikes from this particularly
important period in labor history, including,
for example, Peterson (1938).
However, only one that we were able to
locate, Filippelli (1990), offered us the exact
relevant dates associated with each strike,
which are crucial to the event study method
we employ. In Labor Conflict in the United
States: An Encyclopedia, a host of contributors
provide detailed accounts of various
important strikes during the time period in
question. Obviously, we only focus attention
on a certain select set of strikes.
Filippelli, the editor of the collection, examined
a total of 254 strikes that occurred
over a very long time period—the strikes
“that appear in all standard labor histories,”
he claimed, and that represent, he
hoped, “all of the conflicts that labor histo-
8
In practice, of course, the Clayton Act was not a
panacea for American trade unionism. Indeed, in the
first 24 years after its passage, more cases of antitrust
violations were brought against labor than in the 24
preceding years. See Fisher (1940).
224 INDUSTRIAL AND LABOR RELATIONS REVIEW
rians have agreed are pivotal in American
history” (p. xii). In part due to limitations
of our financial market data, we examine
only 36 strikes occurring over the time
period we consider.
Importantly, this same source also provides
us with a wealth of other valuable
information about each strike that allows
us to create another set of variables, including
the duration of each strike, the industry
involved in the strike, whether the union
was recognized by the struck firm as a result
of the strike, whether the union was new or
established,9
the number of strikers involved,
whether there was violence during
the strike, whether wages increased, decreased,
or stayed the same after the strike,
and who was the eventual “winner” of the
strike (union or management).
Simple statistics for each of the strikes
are contained in Table 1. Obviously, some
of the data in this table, such as the strike’s
start date and the number of strikers involved,
are based on purely “objective” criteria
and are therefore easily culled from
the strike narratives. Other data, such as
whether the union or firm “won,” are more
subjective. We discuss these subjective
measures below.
The first strike in our sample started in
January 1925 and the last one started in
May 1937.10
The strikes occurred in 17
different industries. The average strike
duration was 5.5 months. Violence was
mentioned in the narratives in just over
half of the strikes. Wages decreased in only
a handful of cases, stayed the same in about
half, and increased in just over a third of
strikes. Following Card and Olson (1995),
we also attempted to identify the “winner”
of each strike.11
To situate our sample in the universe of
all strikes that occurred during this period,
we present some information from Griffin
(1939), who included a much larger set of
strikes in his analysis of strikes from 1880 to
1937. Figure 1 (which was generated using
data from the Griffin study) reveals that for
the period 1925–37 (the period we analyze),
the median annual percentage of
strikes that were “successes” (from the perspective
of the unions) was 35%; of “failures,”
33.4%; and of compromises, 30.7%.
Given the consistency with our estimates,
we conclude that the strikes in our sample,
apart from their greater “importance,” are
not radically different from the broader
sample of strikes.
Our stock price data come from Cowles’s
Common-Stock Indexes: 1871–1937 (1938).
This book contains several series for common
stocks by industry by month over a
relatively long time period. One distinguishing
characteristic of the book is the
tremendous amount of effort and meticulous
attention to detail that went into its
description of the data and industries. Included
are indexes on dividend payments,
price-earnings ratios, earnings, stock prices,
and stock prices including cash dividends.
For each industry, we scanned in the stock
prices, including cash dividends, for each
month from 1906 to 1937 (although this
paper only examines strikes that occurred
during the period 1925–37). Because of a
four-month gap in the information during
World War I, we are left with 380 months of
data for each industry. Since we collected
information on 69 industries, this gives us
9
We define an “established” or “old” union by first
identifying the name of the union from accounts in
Filippelli (1990) and a variety of other sources (Gifford
1999; Reynolds and Killingsworth 1944; Fink 1977) to
identify the date the union was established. Unions
older than three years were defined as established.
Our results are robust with respect to different definitions
of “established.”
10
Later strikes are covered in the Filippelli (1990)
volume, but our stock price data (described below)
end at the conclusion of 1937.
11
We identified the union as the winner in 53% of
the strikes. Obviously it is not always easy to identify
the “winner” of a strike. We determined the winner
based on our subjective evaluation of the Filippelli
narratives. In 10% of the cases, the winner of the
strike is not clear (see Table 1). Our results are
insensitive to our treatment of the ambiguous cases.
Below, we further investigate the strikes that led to
union recognition, often one of the key goals of the
strikers.
IMPACT OF STRIKES ON FINANCIAL MARKETS, 1925–1937 225
26,220 industry/months of data.12
It is also
worth noting that we do not have complete
information on security prices for all industries
for the entire time period. One example
is absence of stock prices for automobiles
and trucks, which, as of the late
19th century, had not yet been invented.
Figure 2 displays the average stock price
over time using these data. The dramatic
Table 1. Sample Statistics for the Strikes.
Strike Number Violence Recog- Wages
Start Date Duration of during nition Incr., Decr.,
Industry of Strike (months) Strikers Strike? Strike? or Same Winner
Coal Nov. 1925 5 500 No No Decreased Unclear
Apr. 1927 15 200,000 Yes No Same Mgt.
Apr. 1931 1 200 Yes No Same Mgt.
Jul. 1932 11 — Yes No Decreased Mgt.
Aug. 1933 3 2,000 No No Same Mgt.
Misc. Services May 1934 3 3000 Yes No Increased Union
May 1935 3 20,000 Yes No Increased Union
Shipping May 1934 2 1,000 Yes No Increased Union
Jan. 1936 12 30,000 No No Increased Unclear
Mining May 1935 1 — Yes No Same Mgt.
Steel & Iron May 1937 2 40,000 Yes No Same Mgt.
Electrical Equipment Feb. 1934 4 3,600 Yes Yes Increased Union
Household Products — — 1,000 No Yes Decreased Mgt.
Auto Tires, Rubber June 1934 1 1,100 No Yes Increased Union
Jan. 1936 2 14,000 No Yes Same Union
Food Products Jan. 1930 0 5,000 Yes No Same Mgt.
Nov. 1932 2 400 Yes No Decreased Mgt.
May 1932 50 1,500 No No Same Mgt.
Jan. 1933 0 5,000 Yes No Same Mgt.
Sep. 1935 1 — Yes No Increased Union
May 1936 — 35,000 Yes No Same Mgt.
May 1937 0 2,000 Yes Yes Same Mgt.
Paper Nov. 1934 4 36 No No Same Union
— — 600 No No Same Union
Feb. 1936 9 36 No No Increased Union
Textiles Jan. 1925 23 16,000 Yes Yes Same Union
Apr. 1928 6 27,000 Yes Yes Decreased Union
Apr. 1929 5 1,000 Yes No Same Mgt.
July 1934 2 — Yes No Same Unclear
Oct. 1936 5 3,700 No No Same Mgt.
Tobacco Nov. 1931 1 10,000 No No Same Union
General Motors Sep. 1933 2 5,000 No No Increased Unclear
Nov. 1936 — — No No — —
Dec. 1936 2 47,000 Yes Yes Same Union
— — 7,600 No Yes Increased Union
Autos, non-GM Jan. 1933 1 12,000 No No Increased Union
— — 24,000 No No Same Union
— — 2,000 Yes Yes Same Union
Meat Packing Sep. 1933 — — Yes Yes Increased Union
Radio, Phonograph May 1936 2 6,000 Yes Yes Increased Union
Air Transport Feb. 1932 3 36 No No Increased Union
Source: This information was gathered from narratives in Filippelli (1990).
12
The scanning technology, along with Optical
Character Recognition (OCR) software, worked remarkably
well. We hand-checked each observation
and found that only about 4% were in error.
226 INDUSTRIAL AND LABOR RELATIONS REVIEW
increase up to the great crash of 1929 is
clear from the figure, as is the subsequent
increase.
Empirical Results
In many traditional financial event studies,
it is transparent how one dates an
“event.” The same is not true for all strikes
in our sample. In principle, the appropriate
date is the date at which most of the
“information” in the strike is incorporated.
If the financial markets are forward-looking,
and most of the information is revealed
at the beginning of the strike, then
the date of the strike announcement is
most relevant. Table 2 presents our estimates
of cumulative average excess industry
stock returns for various windows relative
to the strike announcement date. In
Table 3, we concentrate on estimates of the
cumulative average excess industry stock
returns relative to the strike ending date.
We suspect that certain types of news
provoke one reaction from financial markets
at the start of the strike and a different
one at the end.13
Two examples may help
explain this. The number of strikers is
known at the start of the strike, so we expect
this variable to affect prices at the start of
the strike. Since this information is already
known at the strike’s beginning, no doubt
it is already incorporated into stock prices
by the end, and therefore has less of an
effect at that juncture. On the other hand,
we have also recorded information on
whether wages went up, went down, or
stayed the same. However, this is clearly
only known for sure at the end of the strike
(although markets may have an educated
guess at the strike’s onset as to what will
happen to wages by strike’s end) and, therefore,
we expect a larger share price reaction
to wage changes at the end of the
strike. We will discuss share price changes
around the start of the strike (Table 2),
13
We are grateful to an anonymous referee for this
suggestion.
IMPACT OF STRIKES ON FINANCIAL MARKETS, 1925–1937 227
around the end of the strike (Table 3), and
including information from both the start
and the end (Table 4).
Each column of Table 2 reports results
based on a different event window: month
0 (simply the excess return during the strike
start month, averaged over all strikes),
month 0 to month +1 (the sum of the excess
returns over the two-month period from
the month of the strike announcement
through the month after the announcement,
averaged over all strikes), month –1
to month 0, month –1 to month +1, month
–2 to month +2, and month –3 to month +3.
In principle, results from all windows should
be roughly the same. If the frequency of
our stock price information were daily, we
could date strike announcements perfectly,
and if the transmission of “news” and the
markets’ reaction to it are both quick, we
would expect the shortest window to be the
most appropriate window. However, given
the frequency of the stock data and our a
priori expectations concerning the speed of
transmission of economic news from strikes
during the interwar period, our preferred
results are those that use the windows from
t = –1 to 1 month. For completeness, we
also report results for other wider windows.
The first row of the table summarizes the
information for all strikes. For example,
the number –0.030 in the fourth column
represents the cumulative average excess
returns over the three months (–1, 0, and 1
relative to the strike start date) averaged
over all strikes in the sample. This means
that industry stock prices dropped by about
3% around the time of the start of the
strike. The second pair of rows in the table
compares union wins to union losses. That
is, it repeats the same analysis but simply
computes cumulative average excess returns
separately for the sample of strikes that are
defined as “won” or “lost” by the union (see
below). Subsequent sets of rows report
results contrasting “violent” strikes and
nonviolent ones; strikes in which wages
went up with strikes in which they went
down or remained the same; strikes involving
many strikers (more than the median of
3,700) with those involving few strikers;
short strikes (lasting less than the median
of 2 months) with longer ones; strikes that
resulted in recognition of the union by the
firm with those that did not; industry-wide
strikes with strikes of less scope; and strikes
by an established union (defined above)
with other strikes.
The evidence from the table is generally
consistent with the view that the financial
markets viewed these strikes as important.
If they had not, then excess share prices
obviously would not have changed around
the time of news about the strikes. In
general, the results are economically significant
and different from zero at conventional
levels of statistical significance. For
example, the point estimates in the row
labeled “union win” indicate losses to the
firm of about 7% for our preferred specification
(month –1 to month +1) and are
statistically different from zero. In contrast,
union losses led to generally quite
small stock price changes (–1%) that were
not distinguishable from zero at conventional
levels of significance. Note that given
our earlier discussion, it is interesting that
the share price reaction to a union win
(which is not fully known until the strike is
over) is reasonably large at the start of the
strike. Perhaps financial markets could, to
some degree, predict the outcome even at
the start of the strike.14
14
We discuss what happens around the end of the
strike below.
228 INDUSTRIAL AND LABOR RELATIONS REVIEW
More arresting, perhaps, is that when
wages fell in response to the strike, the
estimated positive impact on the value of
the industry was roughly 9% using our preferred
window width, and statistically different
from zero. In contrast, when wages
remained the same or increased (a tiny
fraction of our total observations), our point
estimates indicate that the value of the
industry fell between 3% and 5%, although
our estimates for the cases of “wages up”
are imprecise. The same issue of timing
holds here as well. We discuss the reaction
at the end of the strike below.
Table 2. Cumulative Average Abnormal Industry Stock Returns
for Strikes in the 1920s and 1930s, Where Event Is Defined as Start of Strike.
(T-Statistics in Parentheses)
Months Relative to Strike Announcement Date
t = 0 t = 0 to 1 t = –1 to 0 t = –1 to 1 t = –2 to 2 t = –3 to 3
All Strikes –0.011 –0.024 –0.017 –0.030 –0.013 –0.015
(1.070) (1.580) (1.172) (1.635) (0.539) (0.559)
Union Win –0.020 –0.050 –0.038 –0.068 –0.038 –0.020
(1.034) (1.845) (1.418) (2.067) (0.891) (0.390)
Union Loss –0.004 –0.004 –0.007 –0.008 0.007 –0.016
(0.312) (0.218) (0.475) (0.373) (0.255) (0.536)
Yes Violence –0.019 –0.025 –0.033 –0.040 –0.049 –0.049
(1.616) (1.455) (2.037) (1.909) (1.855) (1.588)
No Violence 0.001 –0.021 0.008 –0.014 0.044 0.038
(0.059) (0.775) (0.307) (0.415) (1.031) (0.736)
Wages Down 0.037 0.092 0.032 0.087 0.128 0.095
(1.916) (2.096) (1.159) (1.814) (2.264) (1.478)
Wages Same –0.014 –0.038 –0.027 –0.050 –0.052 –0.061
(1.094) (2.066) (1.430) (2.222) (1.763) (1.750)
Wages Up –0.016 –0.031 –0.014 –0.029 0.016 0.040
(0.804) (1.085) (0.473) (0.807) (0.344) (0.732)
Many Strikersa
–0.013 –0.016 –0.005 –0.008 –0.015 –0.022
(1.068) (0.949) (0.324) (0.417) (0.575) (0.716)
Few Strikers –0.012 –0.041 –0.026 –0.056 –0.005 0.008
(0.674) (1.636) (1.037) (1.792) (0.123) (0.160)
Short Strikeb
–0.000 –0.004 –0.006 –0.010 0.047 0.045
(0.001) (0.172) (0.268) (0.352) (1.242) (1.009)
Long Strike –0.019 –0.036 –0.024 –0.041 –0.048 –0.052
(1.435) (1.920) (1.285) (1.786) (1.661) (1.494)
Recognition –0.037 –0.061 –0.041 –0.065 –0.088 –0.091
(1.642) (1.933) (1.292) (1.683) (1.764) (1.535)
Not Recognition –0.001 –0.010 –0.008 –0.016 0.017 0.014
(0.088) (0.546) (0.484) (0.787) (0.643) (0.448)
Industry-Wide –0.021 –0.040 –0.051 –0.070 –0.109 –0.125
(0.650) (0.871) (1.125) (1.254) (1.515) (1.461)
Not Industry-Wide –0.010 –0.022 –0.014 –0.026 –0.004 –0.005
(0.931) (1.403) (0.908) (1.358) (0.151) (0.188)
New Unionc
–0.002 –0.015 –0.008 –0.021 0.059 0.057
(0.080) (0.487) (0.247) (0.553) (1.179) (0.963)
Old Union –0.011 –0.016 –0.019 –0.024 –0.049 –0.059
(0.909) (0.829) (1.157) (1.088) (1.747) (1.817)
Note: For description of the strikes, see Table 1.
a
Above the median of 3,700 strikers.
b
Below the median of 2 months.
c
Less than 3 years old.
IMPACT OF STRIKES ON FINANCIAL MARKETS, 1925–1937 229
It is also interesting to note that strikes
leading to the recognition of the union by
the firm appear to have had a much larger
negative share price reaction than strikes
that did not lead to the recognition of a
union. (Compare, for example, –0.065 to –
0.016, in the month –1 to month +1 window
in Table 2.) Also, as expected, strikes that
involved an entire industry had a much
larger negative effect (albeit an imprecisely
estimated one) on industry stock prices
than strikes involving a single firm (or a
small number of firms).
Strikes that involved new versus established
unions are the subject of the last two
rows of Table 2. It appears that, on average,
strikes by established unions led to larger
negative industry share price reactions.
Although these estimates are not precise,
they are consistent with the view that more
established unions have more power against
management than do new unions.
The only apparently anomalous results
for the start of the strike are those for the
number of strikers: our point estimates for
the effect on stock prices are larger in
magnitude for small strikes (–5.6%) than
for large strikes (–0.8%). This is less anomalous
than meets the eye, however, since it is
explicable by our mechanism for choosing
strikes. If size is only one aspect of “importance,”
then strikes with fewer strikers that
made it to the list had to be more important
in other dimensions. The results for other
window widths are generally insignificantly
different from the results for our preferred
window widths, and are generally less pre-
cise.
Table 3 repeats the analysis summarized
in Table 2, except that windows are calculated
around the end date of the strike. In
general, the results are uniformly less precise
and insignificantly different from zero
at conventional levels of significance. One
possible reason for this is that the end of
the strike may be difficult to identify correctly,
especially in those cases where management
is defined as the winner. This is
consistent with the view that most of the
“news” in strikes occurs at the beginning of
the strike, and also agrees with other research.
However, as we noted above, it is
reasonable to expect that some of the information
about the strike, such as who “won”
and whether wages increased, would not be
fully revealed until the end of the strike.
It turns out that the wage changes are
perfectly in line with this idea.15
From the
“wages up,” “wages down,” and “wages same”
section of Table 3, it is clear that this information
had a larger effect around the strike
ending date (where it was more likely to be
fully revealed). In fact, the share price
reaction to “wages down” was approximately
+13%. The other piece of information that
we expected to have a larger impact at the
end of the strike than at the beginning is
who “won” the strike. For some reason, our
empirical findings do not support this idea.
In addition, it is interesting to note what
happened to overall stock prices around
strike start times and strike end times. The
initial news of a strike tended to send stock
prices down (row 1 of Table 2), as clearly
this was a signal of some disruption of business.
On the other hand, the overall stock
price reaction to strike ends was positive
(row 1 of Table 3), which suggests that
investors were happy that the strike was
over and that firms could get back to busi-
ness.
In Table 4, we combine both windows—
around the start of the strike and around
the end of the strike. This is an appropriate
summary if both the strike announcement
and its conclusion contain significant economic
news. Our estimates become somewhat
more precise and the magnitude of
the effects becomes much larger. For our
preferred window widths, union wins lead
to a decrease of roughly 3% in the value of
the firm. For wage changes, our point
estimates are quite large. Strikes that resulted
in lower wages led to increases of
22% in the value of the firm, and strikes
with no wage increases led to losses on the
order of 7%. Likewise, short strikes led to
an increase of roughly 7%, and our longer
15
Again, we thank an anonymous referee for this
suggestion.
230 INDUSTRIAL AND LABOR RELATIONS REVIEW
Table 3. Cumulative Average Abnormal Industry Stock Returns
for Strikes in the 1920s and 1930s, Where Event Is Defined as End of Strike.
(T-Statistics in Parentheses)
Months Relative to Strike Ending Date
t = 0 t = 0 to 1 t = –1 to 0 t = –1 to 1 t = –2 to 2 t = –3 to 3
All Strikes –0.001 0.009 0.011 0.020 0.013 –0.007
(0.061) (0.589) (0.725) (1.107) (0.565) (0.238)
Union Win –0.006 0.009 0.021 0.036 0.012 –0.051
(0.310) (0.353) (0.781) (1.104) (0.285) (0.991)
Union Loss 0.001 –0.000 –0.001 –0.001 0.006 0.016
(0.055) (0.012) (0.036) (0.070) (0.225) (0.501)
Yes Violence –0.003 –0.011 –0.008 –0.016 –0.030 –0.057
(0.276) (0.700) (0.462) (0.786) (1.129) (1.813)
No Violence 0.003 0.040 0.039 0.076 0.080 0.070
(0.169) (1.432) (1.413) (2.223) (1.817) (1.303)
Wages Down 0.081 0.092 0.119 0.130 0.156 0.153
(3.629) (3.034) (3.421) (3.221) (3.216) (2.760)
Wages Same –0.013 –0.014 –0.018 –0.020 –0.022 –0.016
(0.962) (0.778) (0.994) (0.892) (0.749) (0.464)
Wages Up –0.011 0.013 0.016 0.040 0.016 –0.046
(0.531) (0.459) (0.543) (1.121) (0.348) (0.809)
Many Strikersa
–0.001 0.002 –0.008 –0.005 0.000 0.002
(0.089) (0.091) (0.455) (0.250) (0.013) (0.062)
Few Strikers –0.014 0.003 0.009 0.025 0.009 –0.032
(0.760) (0.098) (0.329) (0.785) (0.215) (0.632)
Short Strikeb
0.018 0.041 0.055 0.079 0.077 0.029
(1.147) (1.924) (2.470) (2.927) (2.231) (0.682)
Long Strike –0.018 –0.022 –0.030 –0.035 –0.046 –0.040
(1.243) (1.099) (1.510) (1.413) (1.433) (1.037)
Recognition –0.022 –0.023 –0.031 –0.033 –0.035 –0.085
(1.084) (0.814) (1.101) (0.939) (0.782) (1.591)
Not Recognition 0.007 0.021 0.027 0.040 0.032 0.023
(0.597) (1.197) (1.517) (1.873) (1.144) (0.679)
Industry-Wide –0.046 –0.086 –0.071 –0.111 –0.153 –0.217
(1.034) (1.379) (1.132) (1.454) (1.546) (1.854)
Not Industry-Wide 0.004 0.018 0.019 0.033 0.030 0.014
(0.364) (1.214) (1.250) (1.800) (1.251) (0.492)
New Unionc
0.024 0.085 0.084 0.144 0.131 0.069
(0.986) (2.453) (2.396) (3.387) (2.360) (1.011)
Old Union –0.007 –0.016 –0.023 –0.032 –0.040 –0.063
(0.528) (0.866) (1.178) (1.365) (1.309) (1.739)
Note: For description of the strikes, see Table 1.
a
Above the median of 3,700 strikers.
b
Below the median of 2 months.
c
Less than 3 years old.
strikes led to losses of about 8%. In addition,
using our preferred window width
(month –1 to month +1), recognition strikes
appear to have led to losses of about 10%
(non-recognition strikes led to small gains),
industry-wide strikes resulted in losses
on the order of 18%, and strikes by established
unions had much larger negative
share price reactions than strikes involving
new unions.
As we discuss above, several papers (for
example, Becker and Olson 1986; Neumann
1980; Persons 1995; and Nelson et al. 1994)
have found a negative share price reaction
IMPACT OF STRIKES ON FINANCIAL MARKETS, 1925–1937 231
Table 4. Cumulative Average Abnormal Industry Stock Returns
for Strikes in the 1920s and 1930s: Addition of Returns around Start of Strike and End of Strike.
(T-Statistics in Parentheses)
Months Relative to Strike Starting and Ending Date
t = 0 t = 0 to 1 t = –1 to 0 t = –1 to 1 t = –2 to 2 t = –3 to 3
All Strikes –0.012 –0.015 –0.006 –0.010 0.000 –0.022
(1.072) (1.686) (1.378) (1.975) (0.781) (0.608)
Union Win –0.026 –0.041 –0.017 –0.032 –0.026 –0.071
(1.079) (1.878) (1.619) (2.343) (0.935) (1.065)
Union Loss –0.003 –0.004 –0.008 –0.009 0.013 0.000
(0.317) (0.218) (0.476) (0.380) (0.340) (0.734)
Yes Violence –0.021 –0.036 –0.041 –0.056 –0.079 –0.106
(1.639) (1.615) (2.089) (2.064) (2.172) (2.410)
No Violence 0.004 0.019 0.047 0.062 0.124 0.108
(0.179) (1.629) (1.446) (2.261) (2.089) (1.496)
Wages Down 0.118 0.184 0.151 0.217 0.284 0.248
(4.105) (3.688) (3.612) (3.697) (3.933) (3.131)
Wages Same –0.027 –0.052 –0.045 –0.070 –0.074 –0.077
(1.457) (2.208) (1.742) (2.394) (1.916) (1.810)
Wages Up –0.027 –0.018 0.002 0.011 0.032 –0.006
(0.964) (1.178) (0.720) (1.381) (2.262) (0.085)
Many Strikersa
–0.014 –0.014 –0.013 –0.013 –0.015 –0.020
(1.934) (1.043) (0.898) (0.543) (0.993) (0.722)
Few Strikers –0.026 –0.038 –0.017 –0.031 0.004 –0.024
(0.680) (1.639) (1.132) (1.809) (0.124) (0.172)
Short Strikeb
0.018 0.037 0.049 0.069 0.124 0.074
(0.760) (0.198) (0.424) (0.860) (1.260) (1.191)
Long Strike –0.037 –0.058 –0.054 –0.076 –0.094 –0.092
(1.837) (2.718) (2.784) (3.429) (2.781) (1.642)
Recognition –0.059 –0.084 –0.072 –0.098 –0.123 –0.176
(1.968) (2.097) (1.697) (1.927) (1.930) (2.211)
Not Recognition 0.006 0.011 0.019 0.024 0.049 0.037
(0.603) (1.316) (1.592) (2.032) (1.312) (0.813)
Industry-Wide –0.067 –0.126 –0.122 –0.181 –0.262 –0.342
(1.221) (1.631) (1.596) (1.920) (2.165) (2.360)
Not Industry-Wide –0.006 –0.004 0.005 0.007 0.026 0.009
(1.000) (1.855) (1.545) (2.255) (1.260) (0.527)
New Unionc
0.022 0.070 0.076 0.123 0.190 0.126
(0.989) (2.501) (2.409) (3.432) (2.638) (1.396)
Old Union –0.018 –0.032 –0.042 –0.056 –0.089 –0.122
(1.051) (1.199) (1.651) (1.746) (2.183) (2.515)
Note: For description of the strikes, see Table 1.
a
Above the median of 3,700 strikers.
b
Below the median of 2 months.
c
Less than 3 years old.
to strikes on the order of 1–4%. Our
baseline reaction to stock prices (in row 1
of Table 2) is a loss of 3% of stock price for
the three-month event-window (month –1
through month +1, our preferred specification).
Despite this similarity, we should
again point out some important differences
between our study and the aforementioned
studies.
First, our study concentrates on monthly
returns; the others concentrate on daily
returns. We argue that the decision to
study monthly returns is more reasonable
for our time period. This assumption would
232 INDUSTRIAL AND LABOR RELATIONS REVIEW
most obviously present problems for more
recent time periods; no doubt, markets
react more quickly today than in the past.16
Second, our focus is on industries and previous
research has focused on share price
reactions in individual firms. Finally, we use
data from a period in which labor historians
believe strikes were “pivotal in American
history.” In any event, our results suggest
a relatively large share price reaction
to strikes for entire industries, and these
effects are larger than those found in the
aforementioned studies except for Becker
and Olson (1986), although, like the others,
their focus was on the reactions of
individual firms.
Given our concentration on industry returns,
the magnitude of our estimates might
be surprising, since we expect industrywide
reactions to strikes to be smaller than
the effect on specific firms (as business
moves from struck to nonstruck firms, for
example). Moreover, our evidence is
roughly consistent with that reported by
Kramer and Vasconcellos (1996), who
found effects on nonstruck firms that were
statistically indistinguishable from those on
struck firms from 1982 to 1990. On the
other hand, given our focus on the seminal
industrial relations strikes of the interwar
period, our results are consistent with the
views of historians and others who have
singled out this period as one of unusual
importance in the development of postwar
industrial relations.
Concluding Comments
The primary aim of this work has been to
investigate the effect of strikes on industry
stock prices at a time when unions were
rapidly evolving. In contrast to recent work
on the subject that has used data from the
recent past, we have examined a period of
time when changes in the level of unionization
were more important. One advantage
of this focus is that it is easier to measure
the effect of “large changes” than it is to
detect small changes in the current era of
declining unionization. The time between
the World Wars was particularly important
in the history of unionization. Unlike most
recent strikes, during that earlier period
many strikes were an attempt by workers to
change the “terms of trade” between workers
and employers.
Our empirical approach melds two previous
literatures: in one, the effects of
strikes on industry-wide measures of output,
such as inventories, are studied, and
in the second, a standard “event study”
approach is used to examine the relationship
between strikes and individual
firm stock valuations. We develop a data
set with an unusually rich set of characteristics
for each of the strikes for the
time period 1925–37 and combine this
information with stock return data. We
use a very parsimonious model that helps
provide one consistent interpretation of
our results.
On a descriptive level, we find that strikes
had large negative effects on industry stock
valuation. In addition, longer strikes, violent
strikes, strikes won by the union, strikes
leading to union recognition, industry-wide
strikes, and strikes that led to wage increases
affected industry stock prices more
negatively than strikes with other characteristics.
We also examine industry stock
price movements around the start and the
end of the strike. It seems that “news”
about the strike was revealed early and, in
fact, there is some evidence that investors
were able to predict strike outcomes. However,
we do find larger reactions to some
news that could only be completely revealed
at the end of the strike (for example, worker
wage changes).
The generally asymmetric response of
stock prices to wins and losses is consistent
with our expectations. Our analysis suggests
that financial markets viewed union
victories in the interwar period as very important
determinants of the share of firm
profits going to stockholders.
16
Farber and Hallock (2000) discussed the
changing stock price reaction to job loss announcements
over time using data from 1970–97 and
briefly discussed whether changes in technology
have somehow made news less timely and therefore
less “newsworthy.” They found very little support
for this hypothesis.
IMPACT OF STRIKES ON FINANCIAL MARKETS, 1925–1937 233
REFERENCES
Abowd, John M., George T. Milkovich, and John M.
Hannon. 1990. “The Effects of Human Resource
Management Decisions on Shareholder Value.”
Industrial and Labor Relations Review, Vol. 43, No. 3S
(February), pp. 203S–236S.
Becker, Brian E., and Craig A. Olson. 1986. “The
Impact of Strikes on Shareholder Equity.” Industrial
and Labor Relations Review, Vol. 39, No. 3 (April), pp.
425–38.
Brown, Steven J., and Jerold B. Warner. 1985. “Measuring
Security Price Returns.” Journal of Financial
Economics, Vol. 14, No. 1 (March), pp. 3–31.
Campbell, John Y., Andrew W. Lo, and A. Craig
MacKinlay. 1997. The Econometrics of Financial Markets.
Princeton: Princeton University Press.
Card, David, and Craig Olson. 1995. “Bargaining
Power, Strike Durations, and Wage Outcomes: An
Analysis of Strikes in the 1880s.” Journal of Labor
Economics, Vol. 13, No. 1 (January), pp. 32–61.
Cowles, Alfred, and Associates. 1938. Common-Stock
Indexes. Cowles Commission for Research in Economics
Monograph No. 3, 2nd ed. Bloomington,
Indiana: Principia.
Davidson, Wallace N. III, Dan L. Worrell, and Sharon
H. Garrison. 1988. “Effect of Strike Activity on Firm
Value.” Academy of Management Journal, Vol. 31, No.
2, pp. 387–94.
Fama, Eugene, Lawrence Fisher, Michael Jensen, and
Richard Roll. 1969. “The Adjustment of Stock
Prices to New Information.” International Economic
Review, Vol. 10, No. 1 (February), pp. 1–21.
Farber, Henry S., and Kevin F. Hallock. 2000. “Have
Employment Reductions Become Good News for
Shareholders? The Effect of Job Loss Announcements
on Stock Prices, 1970-97.” Working Paper,
Princeton University and University of Illinois,
March.
Filippelli, Ronald L. 1990. Labor Conflict in the United
States: An Encyclopedia. Garland Reference Library
of Social Science. New York: Garland.
Fink, Gary M. 1977. Labor Unions. The Greenwood
Encyclopedia of American Institutions. Westport,
Conn.: Greenwood.
Fisher, Thomas R. 1940. Industrial Disputes and
Federal Legislation. New York: Columbia University
Press.
Gifford, Court. 1999. Directory of U.S. Labor Organizations.
Washington, D.C.: Bureau of National Affairs.
Griffin, John Ignatius. 1939. Strikes: A Study in
Quantitative Economics. New York: Columbia University
Press.
Kramer, Jonathan K., and Geraldo M. Vasconcellos.
1996. “The Economic Effect of Strikes on the Shareholders
of Nonstruck Competitors.” Industrial and
Labor Relations Review, Vol. 49, No. 2 (January), pp.
213–22.
Lazear, Edward. 1983. “A Competitive Theory of
Monopoly Unionism.” American Economic Review,
Vol. 73, No. 4 (September), pp. 631–43.
MacKinlay, A. Craig. 1997. “Event Studies in Economics
and Finance.” Journal of Economic Literature,
Vol. 35, No. 1 (March), pp. 13–39.
Nelson, Morton, Ben Amoako-Adu, and Brian Smith.
1994. “Impact of Labor Strikes on Equity Values:
Canadian Evidence.” Journal of Economics and Business,
Vol. 46, No. 3 (August), pp. 153–65.
Neumann, George R. 1980. “The Predictability of
Strikes: Evidence from the Stock Market.” Industrial
and Labor Relations Review, Vol. 33, No. 4 (July), pp.
525–35.
Neumann, George R., and Melvin W. Reder. 1984.
“Output and Strike Activity in U.S. Manufacturing:
How Large Are the Losses?” Industrial and Labor
Relations Review, Vol. 37, No. 2 (January), pp. 197–
211.
Persons, Obeua S. 1995. “The Effects of Automobile
Strikes on the Stock Value of Steel Suppliers.” Industrial
and Labor Relations Review, Vol. 49, No. 1
(October), pp. 78–87.
Peterson, Florence. 1938. Strikes in the United States,
1880–1936. In Bulletin of the United States Bureau of
Labor Statistics. Washington, D.C.: GPO.
Rees, A. 1977. The Economics of Trade Unions. Chicago:
University of Chicago Press.
Reynolds, Lloyd G., and Charles C. Killingsworth.
1944. Trade Union Publications: The Official Journals,
Convention Proceedings, and Constitutions of International
Unions and Federations, 1850-1941, Vol. 1. Baltimore:
Johns Hopkins Press.
Ruback, Richard, and Martin Zimmerman. 1984.
“Unionization and Profitability: Evidence from the
Capital Market.” Journal of Political Economy, Vol. 92,
pp. 1134–57.
Rubin, Beth A. 1986. “Class Struggle American Style:
Unions, Strikes, and Wages.” American Sociological
Review, Vol. 51 (October), pp. 618–31.