Unemployment insurance and strikes

In several states workers who are unemployed because of a labor dispute can collect unemployment benefits. Due to imperfect experience rating, such policies can create a public subsidy to strikes. This study examines whether these policies affect strike activity. In particular, both cross-sectional and fixed effects models are employed to test whether an increase in the public subsidy inherent in unemployment insurance leads to an increase in strike frequency. This research was in part supported through a grant from the W. E. Upjohn Institute for Employment Research. We thank Dan Lovallo and Yoshio Okunishi for excellent research assistance.