A CROSS—SECTION STUDY OF THE RELATIONSHIP BETWEEN STRIKES AND MARKET STRUCTURE IN THE UNITED KINGDOM

Abstract

Many of the recent studies of strike activity have used time series data in an attempt to identify the important factors relating to the incidence of strikes. The main problem with this approach is that data for a series of years are used to estimate a single regression relationship when in fact the relationship itself may be changing. In particular, the existence of temporary labour shortages, changes in the structure of industry, different perceptions of the rate of inflation and cyclical fluctuations in the demand for labour, are all factors which are difficult to quantify and yet are relevant to the explanation of time series of strike activity. The approach adopted in this paper is to reduce the importance of these factors by using cross‐section data on the incidence of strikes in different U.K. industries. However, a consequence of this is that other factors relating to the incidence of strikes become relevant. For example, the market structure varies greatly between different industries. In 1968, the concentration ratio (weighted by total sales) for the aircraft industry was 99.4, while that for furniture, bedding and upholstery was 21.5. There are reasons (discussed below) why strike activity and market structure are expected to be related. In this paper a theoretical model is presented which attempts to explain variations in strike behaviour between different industries, and empirical evidence concerning the model is presented, using data for 1963 and 1968.

Citation

HOLDEN, K. (1978), "A CROSS—SECTION STUDY OF THE RELATIONSHIP BETWEEN STRIKES AND MARKET STRUCTURE IN THE UNITED KINGDOM", Journal of Economic Studies, Vol. 5 No. 1, pp. 37-49. https://doi.org/10.1108/eb008072