Social democracy and the decline of strikes

This paper tests if a strong labor movement leads to fewer industrial conflicts. The focus is on Sweden between the first general election in 1919 and the famous Saltsjöbaden Agreement in 1938, a formative period when the country transitioned from fierce labor conflicts to a state of industrial peace. We use panel data techniques to analyze more than 2000 strikes in 103 Swedish towns. We find that a shift of political majority towards the Social Democrats led to a significant decline in strikes, but only in towns where union presence was strong. The strike-reducing mechanism is related to corporatist explanations rather than increased social spending in municipal budgets.