DOES MEDIATION-ARBITRATION REDUCE ARBITRATION RATES? EVIDENCE FROM A NATURAL EXPERIMENT MICHELE CAMPOLIETI AND CHRIS RIDDELL* To study the effect of the introduction of mediation-arbitration as a dispute resolution procedure on interest arbitration, the authors exploit a natural experiment in the arbitration institutions for police and firefighter sectors in the Canadian province of Ontario. They obtain estimates using a difference-in-difference estimator. Results show that the introduction of mediation-arbitration is signifi- cantly associated with increased use of arbitration by firefighters relative to the police. The article also draws on interviews with stake- holders to help explain the mechanisms that contribute to the increase in arbitration rates. M ediation-arbitration (med-arb) is a hybrid dispute resolution process that includes a mediation stage, in which a third-party attempts to resolve a bargaining impasse, and, if an impasse remains after mediation, an arbitration phase, in which an arbitrator issues a binding award that resolves the bargaining impasse. In collective bargaining, med-arb involves the neutral party (hereafter, neutral) playing both roles, the mediator and the arbitrator, a feature that helps give med-arb one of its nicknames, ‘‘med- iation with a club.’’ Legislators have introduced med-arb as a dispute resolu- tion procedure because it has been perceived as addressing some of the limitations of conventional interest arbitration without a mediation stage. In particular, researchers have hypothesized that stronger incentives for settle- ment will be present at the mediation stage since both parties will want to be seen as reasonable to the neutral since that same neutral will act as the arbitrator if necessary. Much like some of the theory behind final-offer *MICHELE CAMPOLIETI is a Professor at the University of Toronto. CHRIS RIDDELL is an Associate Professor at the University of Waterloo. An Online Appendix is available at https://uwaterloo.ca/scholar/c2riddel. For information regarding the data and/or computer programs utilized for this study, please address correspondence to the authors at c2riddel@uwaterloo.ca. KEYWORDs: public sector, collective bargaining, interest arbitration, mediation-arbitration, difference-in- difference estimator ILR Review, XX(X), Month 201X, pp. 1–25 DOI: 10.1177/0019793918810219. Ó The Author(s) 2018 Journal website: journals.sagepub.com/home/ilr Article reuse guidelines: sagepub.com/journals-permissions