The cyclical behavior of holdout durations

Holdouts are the negotiation periods between the expiration of an old wage contract and the signing of a new one. This paper presents an analysis of t he hazard function for holdout durations using data on wage negotiations in The Netherlands. The unemployment rate is found to have a significant nega tive effect on the holdout hazard rate: holdout duration is counter-cyclica l. (C) 1999 Elsevier Science B.V. All rights reserved.