This paper analyses recent trends in wage bargaining institutions in Europe to explain the gradual deterioration in the bargaining position of trade unions. It appears that the integration of European economies is an important factor. This raises the question whether trade unions will respond by coordinating their wages internationally. Our conjecture is that the opportunities for wage coordination are not very strong. This is because of the numerous obstacles associated with heterogenous structures in wage setting in the EU. Softer coordination, e.g. in the form of information exchange or agreements on common rules in wage setting, is more likely to occur and has already been introduced in some cases. If stronger forms of international wage coordination would take off, perhaps in the longer term, this would strengthen the bargaining power of trade unions relative to firms. The implications for equilibrium unemployment are ambiguous. On the one hand, higher bargaining power raises wages and thereby unemployment. On the other hand, it reduces unemployment by better incorporating the response of the ECB to wage demands. Another consequence of stronger forms of international wage coordination may be that the absorption of asymmetric shocks in the EMU gets more problematic. In that case, wage coordination may turn into a nightmare as it hampers a crucial stabilisation mechanism in the EMU.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by European Network of Economic Policy Research Institutes in its series Economics Working Papers with number
020.
Length: 33 pages Date of creation: Jun 2003 Date of revision: Handle: RePEc:epr:enepwp:020
Contact details of provider: Postal: ENEPRI c/o CEPS Place du Congrès 1 1000 Brussels Belgium Phone: +32 2 229 3911 Fax: +32 2 219 4151 Web page: http://www.enepri.org
Order Information: Postal: ENEPRI c/o CEPS Place du Congrès 1 1000 Brussels Belgium Email: Web: http://www.enepri.org
For technical questions regarding this item, or to correct its listing, contact: (CEPS) The email address of this maintainer does not seem to be valid anymore. Please ask CEPS to update the entry or send us the correct address..
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)