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Wage Bargaining and Political Strength in the Public Sector

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Author Info
Torberg Falch () (Department of Economics, Norwegian University of Science and Technology)
Bjarne Strøm () (Department of Economics, Norwegian University of Science and Technology)

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Abstract

This paper analysis the link between political strength and public sector wages using a unique matched individual-employer data set for Norwegian local governments during the period 1990-1998. The results indicate that political strength, measured in several ways, has a positive effect on wages, while administrative strength, measured by the tenure of the chief executive, has a negative effect. The positive effect of political strength is consistent with a model in which the budgetary process is a multistage game and employment is determined in an interaction with interest groups prior to the wage bargain.

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Publisher Info
Paper provided by Department of Economics, Norwegian University of Science and Technology in its series Working Paper Series with number 3203.

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Length: 37 pages
Date of creation: 01 Mar 2003
Date of revision:
Handle: RePEc:nst:samfok:3203

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Related research
Keywords: Public sector labor market Wage bargaining Political strength Budgetary process

Other versions of this item:

Find related papers by JEL classification:
D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

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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.:
  1. John P. Haisken-DeNew & Christoph M. Schmidt, . "Inter-Industry and Inter-Region Differentials: Mechanics and Interpretation," Working Papers 9504, SELAPO Center for Human Resources. [Downloadable!]
  2. Strom, Bjarne, 1995. "Envy, Fairness and Political Influence in Local Government Wage Determination: Evidence from Norway," Economica, London School of Economics and Political Science, vol. 62(247), pages 389-409, August. [Downloadable!] (restricted)
  3. Torberg Falch & Bjarne Strøm, 2006. "Local flexibility in wage setting: evidence from the Norwegian local public sector," Empirical Economics, Springer, vol. 31(1), pages 113-142, March. [Downloadable!] (restricted)
  4. Per Tovmo & Torberg Falch, 2002. "The flypaper effect and political strength," Economics of Governance, Springer, vol. 3(2), pages 153-170, 07. [Downloadable!] (restricted)
  5. Falch, Torberg & Rattso, Jorn, 1999. "Local public choice of school spending: disaggregating the demand function for educational services," Economics of Education Review, Elsevier, vol. 18(3), pages 361-373, June. [Downloadable!] (restricted)
  6. Nouriel Roubini & Jeffrey Sachs, 1989. "Government Spending and Budget Deficits in the Industrial Economies," NBER Working Papers 2919, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  7. Holmlund, Bertil, 1993. "Wage setting in private and public sectors in a model with endogenous government behavior," European Journal of Political Economy, Elsevier, vol. 9(2), pages 149-162, May. [Downloadable!] (restricted)
    Other versions:
  8. Joseph Gyourko & Joseph Tracy, 1989. "Public Sector Bargaining and the Local Budgetary Process," NBER Working Papers 2915, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  9. Edwards, Linda N & Edwards, Franklin R, 1982. "Public Unions, Local Government Structure and the Compensation of Municipal Sanitation Workers," Economic Inquiry, Oxford University Press, vol. 20(3), pages 405-25, July.
  10. Falch, Torberg, 2001. "Collective bargaining in the public sector and the role of budget determination," European Journal of Political Economy, Elsevier, vol. 17(1), pages 75-99, March. [Downloadable!] (restricted)
  11. Goux, Dominique & Maurin, Eric, 1999. "Persistence of Interindustry Wage Differentials: A Reexamination Using Matched Worker-Firm Panel Data," Journal of Labor Economics, University of Chicago Press, vol. 17(3), pages 492-533, July. [Downloadable!] (restricted)
  12. Strom, Bjarne, 1999. " Fiscal Institutions and Wage Bargaining in the Local Public Sector," Scandinavian Journal of Economics, Blackwell Publishing, vol. 101(1), pages 67-82, March. [Downloadable!] (restricted)
  13. John M. Abowd & Francis Kramarz & David N. Margolis, 1999. "High Wage Workers and High Wage Firms," Econometrica, Econometric Society, vol. 67(2), pages 251-334, March.
    Other versions:
  14. Barth, Erling & Bratsberg, Bernt & Naylor, Robin A. & Raaum, Oddbjørn, 2002. "Explaining Variations in Wage Curves: Theory and Evidence," Memorandum 03/2002, Oslo University, Department of Economics. [Downloadable!]
  15. Babcock, Linda C & Engberg, John & Glazer, Amihai, 1997. "Wages and Employment in Public-Sector Unions," Economic Inquiry, Oxford University Press, vol. 35(3), pages 532-43, July.
  16. Allers, Maarten & de Haan, Jakob & Sterks, Cees, 2001. " Partisan Influence on the Local Tax Burden in the Netherlands," Public Choice, Springer, vol. 106(3-4), pages 351-63, March. [Downloadable!] (restricted)
  17. Potters, Jan & Sloof, Randolph, 1996. "Interest groups: A survey of empirical models that try to assess their influence," European Journal of Political Economy, Elsevier, vol. 12(3), pages 403-442, November. [Downloadable!] (restricted)
  18. Ehrenberg, Ronald G. & Goldstein, Gerald S., 1975. "A model of public sector wage determination," Journal of Urban Economics, Elsevier, vol. 2(3), pages 223-245, July. [Downloadable!] (restricted)
  19. Jorid Kalseth & Jørn Rattsø, 1998. "Political Control of Administrative Spending: The Case of Local Governments in Norway," Economics and Politics, Blackwell Publishing, vol. 10(1), pages 63-83, 03. [Downloadable!] (restricted)
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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.)

  1. Wolfgang Eggert & Peter Birch Sørensen, 2007. "The Effects of Tax Competition when Politicians Create Rents to Buy Political Support," EPRU Working Paper Series 07-04, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics. [Downloadable!]
  2. Torberg Falch & Bjarne Strøm, 2006. "Local flexibility in wage setting: evidence from the Norwegian local public sector," Empirical Economics, Springer, vol. 31(1), pages 113-142, March. [Downloadable!] (restricted)
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