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Regional Wage Differentiation and Wage Bargaining Systems in the EU

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Author Info
Athanasios Vamvakidis
Abstract

The theoretical literature has argued that a centralized wage bargaining system may result in low regional wage differentiation and high regional unemployment differentials. The empirical literature has found that centralized wage bargaining leads to lower wage inequality for different skills, industries and population groups, but has not investigated its impact on regional wage differentiation. Empirical evidence in this paper for EU regions for the period 1980-2000 suggests that countries with more coordinated wage bargaining systems have lower regional wage differentials, after controlling for regional productivity and unemployment differentials.

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Paper provided by International Monetary Fund in its series IMF Working Papers with number 08/43.

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Length: 17 pages
Date of creation: 20 Feb 2008
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Handle: RePEc:imf:imfwpa:08/43

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Keywords: Wage bargaining ; European Union ; Unemployment ; Productivity ;

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This paper has been announced in the following NEP Reports: References listed on IDEAS
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  1. Saint-Paul, Gilles, 1997. "Economic Integration, Factor Mobility, and Wage Convergence," CEPR Discussion Papers 1597, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  2. Cukierman, Alex & Lippi, Francesco, 1999. "Central bank independence, centralization of wage bargaining, inflation and unemployment:: Theory and some evidence," European Economic Review, Elsevier, vol. 43(7), pages 1395-1434, June. [Downloadable!] (restricted)
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  3. Carlo Dell'Aringa & Laura Pagani, 2007. "Collective Bargaining and Wage Dispersion in Europe," British Journal of Industrial Relations, Blackwell Publishers Ltd/London School of Economics, vol. 45(1), pages 29-54, 03. [Downloadable!] (restricted)
  4. Alun H. Thomas, 2002. "The Costs and Benefits of Various Wage Bargaining Structures: An Empirical Exploration," IMF Working Papers 02/71, International Monetary Fund. [Downloadable!]
  5. Robert J. Flanagan, 1999. "Macroeconomic Performance and Collective Bargaining: An International Perspective," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1150-1175, September. [Downloadable!] (restricted)
  6. Pench, L.R. & Sestito, P. & Frontini, E., 1999. "Some Unpleasant Arithmetics of Regional Unemployment in the EU. Are there any lessons for EMU?," European Economy - Economic Papers 134, Commission of the EC, Directorate-General for Economic and Financial Affairs (DG ECFIN).
  7. Brunello, Giorgio & Lupi, Claudio & Ordine, Patrizia, 2001. "Widening differences in Italian regional unemployment," Labour Economics, Elsevier, vol. 8(1), pages 103-129, January. [Downloadable!] (restricted)
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