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Wage Dispersion and Decentralization of Wage Bargaining

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Author Info

  • Christian M. Dahl

    ()
    (University of Southern Denmark and CREATES)

  • Daniel le Maire

    ()
    (Department of Economics, University of Copenhagen)

  • Jakob R. Munch

    ()
    (Department of Economics, University of Copenhagen)

Abstract

This paper studies how decentralization of wage bargaining from sector to firm-level influences wage levels and wage dispersion. We use detailed panel data covering a period of decentralization in the Danish labor market. The decentralization process provides variation in the individual worker's wage-setting system that facilitates identification of the effects of decentralization. We find a wage premium associated with firm-level bargaining relative to sector-level bargaining, and that the return to skills is higher under the more decentralized wage-setting systems. Using quantiel regression, we also find that wages are more dispersed under firm-level bargaining compared to more centralized wage-setting systems.

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Bibliographic Info

Paper provided by School of Economics and Management, University of Aarhus in its series CREATES Research Papers with number 2011-48.

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Length: 38
Date of creation: 30 Nov 2011
Date of revision:
Handle: RePEc:aah:create:2011-48

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Web page: http://www.econ.au.dk/afn/

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Keywords: Wage bargaining; decentralization; wage dispersion;

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References

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Citations

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Cited by:
  1. Paul Bingley & Lorenzo Cappellari & Niels Westergård-Nielsen, 2011. "Flexicurity, Wage Dynamics and Inequality over the Life-Cycle," CESifo Working Paper Series 3561, CESifo Group Munich.
  2. Karlson, Nils & Lindberg, Henrik, 2011. "The Decentralization of Wage Bargaining: Four Cases," Ratio Working Papers 178, The Ratio Institute.

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