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Wage Staggering and Wage Leadership in Austria – Review and Implications

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Abstract

This study examines the importance of wage staggering and wage leadership in the Austrian system of collective bargaining. Collective wage agreements in Austria generally remain valid for one year and are staggered; the highest concentrations of new agreements can be found in the months of January, May and November each year. The relevant literature describes Austrian wage bargaining as a system of wage leadership, with the agreement reached by the metal workers, which usually goes into effect in early November of each year, setting a precedent for wage agreements reached by other sectors in the ensuing months. Through an analysis of detailed individual series from the Index of Agreed Minimum Wages, it is actually possible to provide empirical evidence for the existence of wage leadership. The results also show that the wage-leading metal sector is substantially more sensitive to macroeconomic forecasts than the other sectors are. This phenomenon and the rapid transmission to the sectors that follow are probably key reasons why empirical evidence of high real wage flexibility has been found in Austria.

Suggested Citation

  • Markus Knell & Alfred Stiglbauer, 2009. "Wage Staggering and Wage Leadership in Austria – Review and Implications," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 4, pages 79-97.
    • Handle: RePEc:onb:oenbmp:y:2009:i:4:b:4
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    File URL: https://www.oenb.at/dam/jcr:fbc6bb3e-b6e3-4554-9520-ac7ef7f80dce/mop_2009_q4_analyses_04_tcm16-181764.pdf
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    Cited by:

    1. Ragnar Nymoen & Victoria Sparrman & Bjorn Dapi, 2019. "Robustness of the Norwegian wage formation system and free EU labour movement. Evidence from wage data for natives," Discussion Papers 895, Statistics Norway, Research Department.
    2. Camarero, Mariam & D'Adamo, Gaetano & Tamarit, Cecilio, 2014. "Wage leadership models: A country-by-country analysis of the EMU," Economic Modelling, Elsevier, vol. 44(S1), pages 2-11.
    3. Marit Gjelsvik & Ragnar Nymoen & Victoria Sparrman, 2020. "Cointegration and Structure in Norwegian Wage–Price Dynamics," Econometrics, MDPI, vol. 8(3), pages 1-15, July.
    4. Goran Vukšić, 2012. "Sectoral wage dynamics and intersectoral linkages in the context of export competitiveness: the case of Croatia," wiiw Balkan Observatory Working Papers 99, The Vienna Institute for International Economic Studies, wiiw.

    More about this item

    Keywords

    staggered wage contracts; wage leadership; collective wage agreements; Austria;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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