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Wage Dispersion and Decentralization of Wage Bargaining

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Author Info

  • Dahl, Christian M.

    ()
    (University of Southern Denmark)

  • le Maire, Daniel

    ()
    (University of Copenhagen)

  • Munch, Jakob R.

    ()
    (University of Copenhagen)

Abstract

This paper studies how decentralization of wage bargaining from sector to firm-level influences wage levels and wage dispersion. We use detailed panel data covering a period of decentralization in the Danish labor market. The decentralization process provides variation in the individual worker's wage-setting system that facilitates identification of the effects of decentralization. We find a wage premium associated with firm-level bargaining relative to sector-level bargaining, and that the return to skills is higher under the more decentralized wage-setting systems. Using quantile regression, we also find that wages are more dispersed under firm-level bargaining compared to more centralized wage-setting systems.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6176.

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Length: 40 pages
Date of creation: Nov 2011
Date of revision:
Publication status: published in: Journal of Labor Economics, 2013, 31 (3), 501-533
Handle: RePEc:iza:izadps:dp6176

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Keywords: wage dispersion; decentralization; wage bargaining;

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References

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Cited by:
  1. Kreiner, Claus Thustrup & Munch, Jakob R. & Whitta-Jacobsen, Hans Jørgen, 2014. "Taxation and the Long Run Allocation of Labor: Theory and Danish Evidence," IZA Discussion Papers 8246, Institute for the Study of Labor (IZA).
  2. Lorenzo Cappellari, 2011. "Flexicurity, wage dynamics and inequality over the life-cycle," DISCE - Quaderni dell'Istituto di Economia dell'Impresa e del Lavoro ieil0064, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  3. Salverda, Wiemer & Checchi, Daniele, 2014. "Labour-Market Institutions and the Dispersion of Wage Earnings," IZA Discussion Papers 8220, Institute for the Study of Labor (IZA).
  4. Xavier Vollenweider, 2014. "A simple framework for the estimation of climate exposure," Grantham Research Institute on Climate Change and the Environment Working Papers 158, Grantham Research Institute on Climate Change and the Environment.
  5. Karlson, Nils & Lindberg, Henrik, 2011. "The Decentralization of Wage Bargaining: Four Cases," Ratio Working Papers 178, The Ratio Institute.
  6. Damoun Ashournia & Jakob Munch & Daniel Nguyen, 2014. "The Impact of Chinese Import Penetration on Danish Firms and Workers," Economics Series Working Papers 703, University of Oxford, Department of Economics.

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