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Wage Dispersion and Decentralization of Wage Bargaining

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  • 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. Ashournia, Damoun & Munch, Jakob R. & Nguyen, Daniel, 2014. "The Impact of Chinese Import Penetration on Danish Firms and Workers," IZA Discussion Papers 8166, Institute for the Study of Labor (IZA).
  2. Xavier Vollenweider, 2014. "A simple framework for the estimation of climate exposure," Grantham Research Institute on Climate Change and the Environment Working Papers 158, Grantham Research Institute on Climate Change and the Environment.
  3. Kreiner, Claus Thustrup & Munch, Jakob Roland & Whitta-Jacobson, Hans-Jørgen, 2013. "Taxation and the Long Run Allocation of Labor: Theory and Danish Evidence," CEPR Discussion Papers 9275, C.E.P.R. Discussion Papers.
  4. Paul Bingley & Lorenzo Cappellari & Niels Westergård-Nielsen, 2012. "Flexicurity, wage dynamics and inequality over the life-cycle," Working Papers 2, Department of the Treasury, Ministry of the Economy and of Finance.
  5. Karlson, Nils & Lindberg, Henrik, 2011. "The Decentralization of Wage Bargaining: Four Cases," Ratio Working Papers 178, The Ratio Institute.
  6. Salverda, Wiemer & Checchi, Daniele, 2014. "Labour-Market Institutions and the Dispersion of Wage Earnings," IZA Discussion Papers 8220, Institute for the Study of Labor (IZA).

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