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Risk Preference and the Interindustry Propensity to Strike

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  • J. Paul Leigh

Abstract

This paper presents a model of the determinants of a union's decision to strike. The model states that, assuming management is risk neutral, workers' tastes for risks will be one important determinant of the decision to strike. A risk preference variable from the Panel Survey of Income Dynamics and an injury and illness rate for each of 89 manufacturing industries serve as measures of workers' tastes for risk. The model predicts that industries with high injury rates will experience a disproportionate share of strikes and that a greater share of weakly risk-averse workers will be employed in strike-prone industries than in strike-free industries. The author discovers strong support for the first prediction, but not for the second.

Suggested Citation

  • J. Paul Leigh, 1983. "Risk Preference and the Interindustry Propensity to Strike," ILR Review, Cornell University, ILR School, vol. 36(2), pages 271-285, January.
    • Handle: RePEc:sae:ilrrev:v:36:y:1983:i:2:p:271-285
    DOI: 10.1177/001979398303600209
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