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

  • Philip Du Caju

    (National Bank van Belgie)

  • Erwan Gautier

    (IEMN-IAE LEMNA and Banque de France)

  • Daphne Momferatu

    (European Central Bank)

  • Melanie Ward-Warmedinger

    (European Central Bank)

This paper presents information on wage bargaining institutions, collected using a standarised 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 alomost 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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Article provided by Cyprus Economic Society and University of Cyprus in its journal Ekonomia.

Volume (Year): 12 (2009)
Issue (Month): 2 (Winter)
Pages: 57-108

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Handle: RePEc:ekn:ekonom:v:12:y:2009:i:2:p:57-108
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  1. Dickens, William T. & Götte, Lorenz & Groshen, Erica L. & Holden, Steinar & Messina, Julián & Schweitzer, Mark E. & Turunen, Jarkko & Ward-Warmedinger, Melanie, 2006. "How wages change: micro evidence from the International Wage Flexibility Project," Working Paper Series 0697, European Central Bank.
  2. Acocella, Nicola & Di Bartolomeo, Giovanni & Hibbs Jr., Douglas A., 2008. "Labor market regimes and the effects of monetary policy," Journal of Macroeconomics, Elsevier, vol. 30(1), pages 134-156, March.
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  5. Cecchetti, Stephen G, 1987. "Indexation and Incomes Policy: A Study of Wage Adjustment in Unionized Manufacturing," Journal of Labor Economics, University of Chicago Press, vol. 5(3), pages 391-412, July.
  6. Taylor, John B, 1983. "Union Wage Settlements during a Disinflation," American Economic Review, American Economic Association, vol. 73(5), pages 981-93, December.
  7. Robert J. Barro & David B. Gordon, 1983. "Rules, Discretion and Reputation in a Model of Monetary Policy," NBER Working Papers 1079, National Bureau of Economic Research, Inc.
  8. Hartog, Joop & Leuven, Edwin & Teulings, Coen N, 1997. "Wages and the Bargaining Regime in a Corporatist Setting: The Netherlands," CEPR Discussion Papers 1706, C.E.P.R. Discussion Papers.
  9. Tobin, James, 1972. "Inflation and Unemployment," American Economic Review, American Economic Association, vol. 62(1), pages 1-18, March.
  10. Ana Rute Cardoso & Pedro Portugal, 2005. "Contractual Wages and the Wage Cushion under Different Bargaining Settings," Journal of Labor Economics, University of Chicago Press, vol. 23(4), pages 875-902, October.
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  12. Daniele Checchi & Claudio Lucifora, 2002. "Unions and labour market institutions in Europe," Economic Policy, CEPR;CES;MSH, vol. 17(35), pages 361-408, October.
  13. 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.
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