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Institutional Features of Wage Bargaining in 23 European Countries, the US and Japan

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  • Du Caju, Philip

    ()
    (National Bank of Belgium)

  • Gautier, Erwan

    ()
    (Bank of France)

  • Momferatou, Daphne

    ()
    (European Central Bank)

  • Ward-Warmedinger, Melanie E.

    ()
    (European Central Bank)

Abstract

This paper presents information on wage bargaining institutions, collected using a standardized questionnaire. Our data provide information from 1995 and 2006, for four sectors of activity and the aggregate economy, considering 23 European countries, plus the US and Japan. Main findings include a high degree of regulation in wage setting in most countries. Although union membership is low in many countries, union coverage is high and almost all countries also have some form of national minimum wage. Most countries negotiate wages on several levels, the sectoral level still being the most dominant, with an increasingly important role for bargaining at the firm level. The average length of collective bargaining agreements is found to lie between one and three years. Most agreements are strongly driven by developments in prices and eleven countries have some form of indexation mechanism which affects wages. Cluster analysis identifies three country groupings of wage-setting institutions.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3867.

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Length: 50 pages
Date of creation: Dec 2008
Date of revision:
Handle: RePEc:iza:izadps:dp3867

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Keywords: wage bargaining; institutions; indexation; trade union membership; cluster analysis;

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  1. Acocella, Nicola & Di Bartolomeo, Giovanni & Hibbs Jr., Douglas A., 2004. "Labor market regimes and the effects of monetary policy," Working Papers in Economics, University of Gothenburg, Department of Economics 145, University of Gothenburg, Department of Economics, revised 22 Apr 2005.
  2. William T. Dickens & Lorenz Goette & Erica L. Groshen & Steinar Holden & Julian Messina & Mark E. Schweitzer & Jarkko Turunen & Melanie E. Ward, 2006. "How wages change: micro evidence from the International Wage Flexibility Project," Working Paper 0620, Federal Reserve Bank of Cleveland.
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  6. Teulings,Coen & Hartog,Joop, 2008. "Corporatism or Competition?," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521049399.
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  8. Cecchetti, Stephen G, 1987. "Indexation and Incomes Policy: A Study of Wage Adjustment in Unionized Manufacturing," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 5(3), pages 391-412, July.
  9. Cukierman, Alex & Lippi, Francesco, 1999. "Central bank independence, centralization of wage bargaining, inflation and unemployment:: Theory and some evidence," European Economic Review, Elsevier, Elsevier, vol. 43(7), pages 1395-1434, June.
  10. John B. Taylor, 1982. "Union Wage Settlements During a Disinflation," NBER Working Papers 0985, National Bureau of Economic Research, Inc.
  11. Tobin, James, 1972. "Inflation and Unemployment," American Economic Review, American Economic Association, American Economic Association, vol. 62(1), pages 1-18, March.
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  13. Fregert, Klas & Jonung, Lars, 1998. "Monetary Regimes And Endogenous Wage Contracts: Sweden 1908-1995," Working Papers, Lund University, Department of Economics 1998:3, Lund University, Department of Economics, revised 21 Apr 1999.
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