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Bargaining (De)centralization, Macroeconomic Performance and Control over the Employment Relationship

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  • Franz Traxler

Abstract

Based on data for 20 OECD countries, this paper analyses the effect of bargaining centralization on performance and control over the employment relationship. Rejecting both the corporatist thesis and the hump–shape thesis, the paper finds that performance either increases or decreases with centralization, depending on the ability of the higher level to bind lower levels. There is a clear effect on control in that bargaining coverage significantly declines with decentralization. Employers can therefore expect to extend management prerogatives, rather than improve performance, when enforcing decentralization. Hence the literature on bargaining structures when focusing on performance has lost sight of their contested nature.

Suggested Citation

  • Franz Traxler, 2003. "Bargaining (De)centralization, Macroeconomic Performance and Control over the Employment Relationship," British Journal of Industrial Relations, London School of Economics, vol. 41(1), pages 1-27, March.
    • Handle: RePEc:bla:brjirl:v:41:y:2003:i:1:p:1-27
    DOI: 10.1111/1467-8543.00259
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    References listed on IDEAS

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    1. Lindbeck, A & Snower, D-J, 1996. "Centralized Bargaining, Multi-Tasking, and Work Incentives," Papers 620, Stockholm - International Economic Studies.
    2. Lars Calmfors, 1993. "Centralisation of Wage Bargaining and Macroeconomic Performance: A Survey," OECD Economics Department Working Papers 131, OECD Publishing.
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    Cited by:

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    2. Markus Leibrecht & Silvia Rocha-Akis, 2014. "Sozialpartnerschaft und makroökonomische Performance," WIFO Monatsberichte (monthly reports), WIFO, vol. 87(8), pages 555-567, August.
    3. Andréasson, Hannes, 2014. "The effect of decentralized wage bargaining on the structure of wages and firm performance," Ratio Working Papers 241, The Ratio Institute.
    4. Seppo Honkapohja & Frank Westermann, 2009. "Pay-setting Systems in Europe: Ongoing Developments and Possible Reforms," Palgrave Macmillan Books, in: Seppo Honkapohja & Frank Westermann (ed.), Designing the European Model, chapter 3, pages 82-121, Palgrave Macmillan.
    5. Karl Aiginger & Thomas Horvath & Helmut Mahringer, 2012. "Why Labor Market Response Differed in the Great Recession: The Impact of Institutions and Policy," DANUBE: Law and Economics Review, European Association Comenius - EACO, issue 3, pages 1-19, September.
    6. Martin Behrens & Alexander J. S. Colvin & Lisa Dorigatti & Andreas H. Pekarek, 2020. "Systems for Conflict Resolution in Comparative Perspective," ILR Review, Cornell University, ILR School, vol. 73(2), pages 312-344, March.
    7. Schnabel, Claus, 2006. "Verbetrieblichung der Lohnfindung und der Festlegung von Arbeitsbedingungen," Arbeitspapiere 118, Hans-Böckler-Stiftung, Düsseldorf.
    8. Franz Traxler & Bernd Brandl, 2011. "The Economic Impact of Collective Bargaining Coverage," Chapters, in: Susan Hayter (ed.), The Role of Collective Bargaining in the Global Economy, chapter 9, Edward Elgar Publishing.
    9. Paul Jonker-Hoffrén, 2013. "The influence of internal union factions on union renewal strategies: the case of the Finnish Paper Workers' Union," Industrial Relations Journal, Wiley Blackwell, vol. 44(3), pages 276-295, May.
    10. Valentina Paolucci & Paul Marginson, 2020. "Collective bargaining towards mutual flexibility and security goals in large internationalised companies—why do institutions (still) matter?," Industrial Relations Journal, Wiley Blackwell, vol. 51(4), pages 329-350, July.
    11. Berthold, Norbert & Gründler, Klaus, 2011. "Nation size and unemployment," Discussion Paper Series 116, Julius Maximilian University of Würzburg, Chair of Economic Order and Social Policy.
    12. Vera Glassner & Maarten Keune & Paul Marginson, 2011. "Collective bargaining in a time of crisis: developments in the private sector in Europe," Transfer: European Review of Labour and Research, , vol. 17(3), pages 303-322, August.
    13. Damian Grimshaw & Mat Johnson & Stefania Marino & Jill Rubery, 2017. "Towards more disorganised decentralisation? Collective bargaining in the public sector under pay restraint," Industrial Relations Journal, Wiley Blackwell, vol. 48(1), pages 22-41, January.
    14. Colin Crouch, 2011. "Franz Traxler †(21.11.1951 — 22.01.2010)," Transfer: European Review of Labour and Research, , vol. 17(3), pages 287-290, August.
    15. Franz Traxler, 2003. "The Contingency Thesis of Collective Bargaining Institutions," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 1(02), pages 34-39, October.
    16. Marc van Essen & J. (Hans) van Oosterhout & Pursey P. M. A. R. Heugens, 2013. "Competition and Cooperation in Corporate Governance: The Effects of Labor Institutions on Blockholder Effectiveness in 23 European Countries," Organization Science, INFORMS, vol. 24(2), pages 530-551, April.
    17. repec:ces:ifodic:v:1:y:2003:i:2:p:14567948 is not listed on IDEAS
    18. Fei Peng & Sajid Anwar & Lili Kang, 2020. "Job Movement and Real Wage Flexibility in Eastern and Western Parts of Germany," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 44(4), pages 764-789, October.
    19. Schnabel, Claus & Zagelmeyer, Stefan & Kohaut, Susanne, 2005. "Collective bargaining structure and its determinants : an empirical analysis with British and German establishment data," IAB-Discussion Paper 200516, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    20. Colin Crouch, 2017. "Membership density and trade union power," Transfer: European Review of Labour and Research, , vol. 23(1), pages 47-61, February.
    21. Jesús Ferreiro & Carmen Gómez, 2008. "Is Wages Policy on the Agenda of Trade Unions Again? Voluntary Wage Moderation in Spain," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 29(1), pages 64-95, February.

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