Work Stoppages and the Theory of the Offset Factor: Evidence from the British Columbian Lumber Industry

One method of estimating losses resulting from work stoppages is to multiply the total number of man-days lost during disputes by the average product of workers. This statistic can be easily calculated using information typically available from government agencies, but has obvious flaws. For example, the behavior of other firms not involved in disputes is ignored. Moreover, when output is durable, the impact on consumption is unknown since inventories can be used as buffers. To assess the importance of these and other considerations, the author develops an alternative empirical framework and implements it using data from the British Columbian lumber industry. Copyright 1990 by University of Chicago Press.