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Centralized Bargaining, Efficiency Wages, and Flexibility

Author

Listed:
  • Mr. Ramana Ramaswamy
  • Mr. Bob Rowthorn

Abstract

The main focus of the “wage bargaining” literature has been on the factors promoting real wage flexibility at the macro level. This paper, in contrast, examines the microeconomic issues of wage bargaining. More specifically, this paper appraises the following questions: (a) what are the conditions under which a firm prefers decentralized to centralized bargaining?, (b) what are the characteristic features of firms which prefer decentralized to centralized bargaining?, and (c) has the proportion of firms which prefer decentralized bargaining increased over time? These questions are examined in an efficiency wage model with insider-outsider features. This paper provides useful theoretical insights for understanding the issues involved in shifting from centralized to decentralized wage bargaining.

Suggested Citation

  • Mr. Ramana Ramaswamy & Mr. Bob Rowthorn, 1993. "Centralized Bargaining, Efficiency Wages, and Flexibility," IMF Working Papers 1993/025, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:1993/025
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    Citations

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    Cited by:

    1. Florian Baumann & Tobias Brändle, 2017. "We Want Them All Covered! Collective Bargaining and Firm Heterogeneity: Theory and Evidence from Germany," British Journal of Industrial Relations, London School of Economics, vol. 55(3), pages 463-499, September.
    2. Gerlach, Knut & Jirjahn, Uwe, 1998. "Technischer Fortschritt, Arbeitsorganisation und Qualifikation : eine empirische Analyse für das Verarbeitende Gewerbe Niedersachsens (Technological progress, organisation of labour, and qualification," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 31(3), pages 426-437.
    3. Hirsch, Boris & Merkl, Christian & Müller, Steffen & Schnabel, Claus, 2014. "Centralized vs. decentralized wage formation: The role of firms' production technology," Kiel Working Papers 1927, Kiel Institute for the World Economy (IfW Kiel).
    4. Muhammad Salam & Javed Iqbal & Anwar Hussain & Hamid Iqbal, 2018. "The Determinants of Services Sector Growth: A Comparative Analysis of Selected Developed and Developing Economies," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 57(1), pages 27-44.
    5. Blackett, Adelle. & Sheppard, Colleen., 2003. "The links between collective bargaining and equality," ILO Working Papers 993687513402676, International Labour Organization.
    6. Fehn, Rainer, 2002. "Arbeitsmarktflexibilisierung und Arbeitslosigkeit," Discussion Paper Series 54, Julius Maximilian University of Würzburg, Chair of Economic Order and Social Policy.
    7. Schnabel, Claus & Zagelmeyer, Stefan & Kohaut, Susanne, 2005. "Collective bargaining structure and its determinants : an empirical analysis with British and German establishment data," IAB-Discussion Paper 200516, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    8. Kohaut Susanne & Schnabel Claus, 2003. "Tarifverträge – nein danke!? Ausmaß und Einflussfaktoren der Tarifbindung west- und ostdeutscher Betriebe / Collective Agreements - No Thanks!? Extent and Determinants of Firms’ Bargaining Coverage in," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 223(3), pages 312-331, June.
    9. Jirjahn, Uwe, 2021. "Membership in Employers' Associations and Collective Bargaining Coverage in Germany," GLO Discussion Paper Series 954, Global Labor Organization (GLO).
    10. Norbert Berthold & Rainer Fehn, 2003. "Unemployment in Germany: Reasons and Remedies," CESifo Working Paper Series 871, CESifo.
    11. Bernd Brandl & Nils Braakmann, 2021. "The effects of collective bargaining systems on the productivity function of firms: An analysis of bargaining structures and processes and the implications for policy making," Industrial Relations Journal, Wiley Blackwell, vol. 52(3), pages 218-236, May.
    12. Uwe Jirjahn, 2023. "Membership in employers’ associations and collective bargaining coverage in Germany," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 44(3), pages 798-826, August.
    13. Frank Scharr, 2005. "Tarifbindung, Rententeilung und Konzessionsverträge als Einflussgrößen der Lohnhöhe in Unternehmen : eine Untersuchung mit Mikrodaten für thüringische Firmen," ifo Dresden Studien, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 39.
    14. Gerlach, Knut & Jirjahn, Uwe, 1998. "Technischer Fortschritt, Arbeitsorganisation und Qualifikation : eine empirische Analyse für das Verarbeitende Gewerbe Niedersachsens (Technological progress, organisation of labour, and qualification," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 31(3), pages 426-437.
    15. Schnabel, Claus, 2006. "Verbetrieblichung der Lohnfindung und der Festlegung von Arbeitsbedingungen," Arbeitspapiere 118, Hans-Böckler-Stiftung, Düsseldorf.
    16. repec:ilo:ilowps:368751 is not listed on IDEAS

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