ABSTRACT With fewer young people entering public service, public employers and the corresponding trade unions aim at signaling that they offer attractive working conditions. However, in the struggle for attractive conditions, labor market conflicts occur between public employers and public sector unions when bargains fail. According to signaling theory, such conflicts could serve as negative signals and thus decrease attraction to the profession. We investigate the signaling effects of two large‐scale labor market conflicts in Denmark, a nurse strike and a teacher lockout, on applications to the respective nursing and teacher education programs. For both conflicts, we employ a synthetic control design to estimate that each conflict resulted in 17%–23% fewer first‐priority applications. The findings suggest that labor market conflicts function as negative signals that decrease attraction to the given career and highlight that there are hidden costs to labor market conflicts for policymakers, public employers, and public sector unions.
Heide et al. (Tue,) studied this question.