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Wage Bargaining, Privatisation, Ability to Pay and Outside Options: Evidence from Hungary

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  • Janos Kollő
  • Tomasz Mickiewicz

Abstract

This article examines the determinants of short-term wage dynamics, using a sample of large Hungarian companies for 1996-99. We test the basic implications of an efficient contract model of bargaining between incumbent employees and managers, which the data do not reject. In particular, there are structural differences between the ownership sectors consistent with our prior knowledge on relative bargaining strength and unionisation measures. Stronger bargaining position of workers leads to higher ability to pay elasticity of wages, and lower outside option elasticity. Our results indicate that while bargaining position of workers in domestic privatised firms may be weaker than in the state sector, the more robust difference relates to state sector workers versus privatised firms with majority foreign ownership.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Post-Communist Economies.

Volume (Year): 17 (2005)
Issue (Month): 4 ()
Pages: 465-483

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Handle: RePEc:taf:pocoec:v:17:y:2005:i:4:p:465-483

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Cited by:
  1. Karoly Fazekas & Gyorgy Molnar (ed.), 2011. "The Hungarian Labour Market 2011," The Hungarian Labour Market Yearbooks, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences, number 2011, January.

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