Interest arbitration is an important tool in public sector bargaining, since public safety workers are prohibited from striking. There is concern, however, over the effects of interest arbitration on impasse rates, most notably theorized by the so-called “chilling” and “narcotic” effects. Overall, interest arbitration has been associated with an increase in impasse rates compared to situations where workers are allowed to go on strike, but the reasons and extent to which this is the case are debatable. Previous theoretical work suggests a strong chilling effect on negotiations when interest arbitration is an option, but the empirical support for this theory is limited. As well, empirical support for a narcotic effect is weak, at least after the first three years of bargaining under interest arbitration. Although we are generally in a period retrenchment of bargaining rights, this issue remains an important one, particularly in states where the extension of interest arbitration to new groups (e.g. teachers) is being debated and in light of the interest arbitration provisions of recent Employee Free Choice Act
