DETERMINANTS OF CONTRACT DURATION IN COLLECTIVE-BARGAINING AGREEMENTS

The author develops a model incorporating variables that previous studies have hypothesized as determinants of labor contract duration, then empirically tests the model using a data set containing bargaining pair-specific, industry-specific, and union-specific variables on 373 contracts signed over the period 1977-87. Three findings, all consistent with the model, are that the rate of wage change in a contract is positively related to the contract's duration; contracts containing cost-of-living adjustments (COLAs) tend to be considerably longer in duration than contracts without COLAs; and over the period studied, there was a substantial increase in average contract duration, even with controls for many economic factors.