S. Jimenez-martin, Controlling for endogeneity of strike variables in the estimation of wage settlement equations, J LABOR EC, 17(3), 1999, pp. 583-606
This article analyzes wage changes with an unbalanced panel from the Spanis
h Collective Bargaining in Large Firms survey. Central to the analysis are
the joint determination of strike and wage outcomes and, in particular, the
estimation of the slope of the wage concession curve. I control for the po
ssible endogeneity of strike variables in the wage equation and suggest two
sets of instruments: lagged strike outcomes or reduced-form predictions of
the strike variables. When controlling for endogeneity, a negative relatio
nship between strike duration and the size of the wage change arises. Howev
er, short strikes still produce higher wage changes.