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Bargaining Regimes and Wage Dispersion

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  • Barth, Erling
  • Zweimuller, Josef

Abstract

The paper studies the relationship between wage dispersion and centralization. We distinguish between two sources of wage differentials: Heterogenous -workers with different skills and firms with varying levels of economic rent per employee. The corresponding dimensions of centralization, i.e. coordination across skills or across firms and industries, are studied separately. The analysis shows that centralization may produce both lower and higher skills differentials, depending on the relative factor shares of the different types of workers. Inter-firm or -industry wage differentials among workers of identical productive characteristics, on the other hand, is always reduced with a higher degree of centralization. With a high- and a low-wage sector, the central union tends to gain from the shift in employment associated with a narrowing of the wage gap since more workers are employed in the high-wage sector.

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Bibliographic Info

Paper provided by Institute of Industrial Relations, UC Berkeley in its series Institute for Research on Labor and Employment, Working Paper Series with number qt5w75g2d8.

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Date of creation: 01 Jun 1993
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Handle: RePEc:cdl:indrel:qt5w75g2d8

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Related research

Keywords: Barth; Zweimuller; bargaining; regimes; wage dispersion;

References

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  1. Michael Bruno & Jeffrey D. Sachs, 1985. "Economics of Worldwide Stagflation," NBER Books, National Bureau of Economic Research, Inc, number brun85-1, May.
  2. Holden, S. & Raaum, O., 1989. "Wage Moderation And Unions Structure," Memorandum 06/1989, Oslo University, Department of Economics.
  3. Hoel, Michael, 1989. "Efficiency wages and local versus central wage bargaining," Economics Letters, Elsevier, vol. 30(2), pages 175-179, August.
  4. McDonald, Ian M & Solow, Robert M, 1981. "Wage Bargaining and Employment," American Economic Review, American Economic Association, vol. 71(5), pages 896-908, December.
  5. Barth, Erling & Zweimuller, Josef, 1992. "Labor Market Institutions and the Industry Wage Distribution: Evidence from Austria, Norway, and the U.S," Institute for Research on Labor and Employment, Working Paper Series qt1811h146, Institute of Industrial Relations, UC Berkeley.
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