Cost-of-Living Clauses in Union Contracts

Determinants and Effects

Bibliographic Data

ID3259173
AuthorsWallace E Hendricks, Wallace Hendricks, Lawrence M Kahn (0000-0001-5291-4304)
Year1983
Volume36
Issue3
Pages447
Publication date1983-04-01
Peer ReviewedYes
Open AccessNo
TypeARTICLE
VenueIndustrial and Labor Relations Review (JOURNAL)
Journal identifiersISSN: 0019-7939 • E-ISSN: 2162-271X
PublisherJSTOR (PUBLISHER)
DOI10.2307/2523022
OpenAlexW4254869869
LanguageEN
Citations received8

This study investigates, for the period 1969-81, the determinants of the incidence and strength of cost-of-living adjustment (COLA) clauses in U.S. manufacturing and the effect of those clauses on wage inflation. The sample includes approximately 5,570 union contracts in over 2,600 bargaining relationships. The authors find that both union bargaining power and inflation uncertainty positively affected the probability that a COLA clause was adopted as well as the strength of the clause adopted. Negatively influencing the incidence and strength of COLA clauses during the period studied were unanticipated changes in an industry's prices. The authors also find evidence that wage inflation was greater under contracts with uncapped COLAs than under all other contracts, a result that also was positively influenced by the amount of unanticipated inflation. From these results, the authors suggest a number of possible trends in the use and effects of COLA clauses

Bargaining power · Business · Cola (plant) · Economics · Inflation (cosmology) · Labour economics · Microeconomics · Monetary economics · Sample (material) · Wage · Corporate Governance and Law · Labor Movements and Unions · Law, Economics, and Judicial Systems · Merger and Competition Analysis

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