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Bargaining Structure, Wage Determination, and Wage Dispersion in 6 OECD-Countries


  • Zweimuller, Josef
  • Barth, Erling


The paper examines the role of collective bargaining systems as a determinant of the inter-industry wage structure. It compares wage patterns of six countries: Austria, Canada, Germany, Norway, Sweden and the U.S.. We use comparable wage regressions from micro cross-sections data to calculate inequality in pay across sectors. Our findings suggest the following: First, high (low) wage sectors in one country tend to be high (low) wage sectors in others, irrespective of the (dis)similarity in labor market institutions. Second, differences in the amount of pay inequality are likely to be the result of differences in collective bargaining: more centralized bargaining structures tend to narrow pay differentials across industries.

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  • Zweimuller, Josef & Barth, Erling, 1992. "Bargaining Structure, Wage Determination, and Wage Dispersion in 6 OECD-Countries," Institute for Research on Labor and Employment, Working Paper Series qt5hk5x5hk, Institute of Industrial Relations, UC Berkeley.
  • Handle: RePEc:cdl:indrel:qt5hk5x5hk

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    References listed on IDEAS

    1. Krueger, Alan B & Summers, Lawrence H, 1988. "Efficiency Wages and the Inter-industry Wage Structure," Econometrica, Econometric Society, vol. 56(2), pages 259-293, March.
    2. William T. Dickens & Lawrence F. Katz, 1987. "Inter-Industry Wage Differences and Theories of Wage Determination," NBER Working Papers 2271, National Bureau of Economic Research, Inc.
    3. William T. Dickens, 1986. "Wages, Employment and the Threat of Collective Action by Workers," NBER Working Papers 1856, National Bureau of Economic Research, Inc.
    4. Edin, Per-Anders & Zetterberg, Johnny, 1992. "Interindustry Wage Differentials: Evidence from Sweden and a Comparison with the United States," American Economic Review, American Economic Association, vol. 82(5), pages 1341-1349, December.
    5. Zweimuller, Josef, 1992. "Survey non-response and biases in wage regressions," Economics Letters, Elsevier, vol. 39(1), pages 105-109, May.
    6. Winter-Ebmer, Rudolf, 1994. "Endogenous Growth, Human Capital, and Industry Wages," Bulletin of Economic Research, Wiley Blackwell, vol. 46(4), pages 289-314, October.
    7. Alan B. Krueger & Lawrence H. Summers, 1986. "Reflections on the Inter-Industry Wage Structure," NBER Working Papers 1968, National Bureau of Economic Research, Inc.
    8. Wagner, Joachim, 1990. "An international comparison of sector wage differentials," Economics Letters, Elsevier, vol. 34(1), pages 93-97, September.
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    Cited by:

    1. Ramos Parreno, Jose Maria & Sanchez-Losada, Fernando, 2002. "The role of unions in an endogenous growth model with human capital," Journal of Macroeconomics, Elsevier, vol. 24(2), pages 171-192, June.
    2. Gruetter, Max & Lalive, Rafael, 2009. "The importance of firms in wage determination," Labour Economics, Elsevier, vol. 16(2), pages 149-160, April.
    3. Arne Heise, 2006. "A Post-Kaleckian, Post-Olsonian Approach to Unemployment and Income Inequality in Modern Varieties of Capitalism," Annals of Economics and Finance, Society for AEF, vol. 7(2), pages 357-383, November.
    4. Barth, Erling & Moene, Karl O. & Willumsen, Fredrik, 2015. "Reprint of "The Scandinavian model—An interpretation"," Journal of Public Economics, Elsevier, vol. 127(C), pages 17-29.
    5. François Rycx & Robert Plasman, 2001. "Collective bargaining and poverty: a cross-national perspective," ULB Institutional Repository 2013/795, ULB -- Universite Libre de Bruxelles.
    6. Raaum, Oddbjorn & Torp, Hege, 2002. "Labour market training in Norway--effect on earnings," Labour Economics, Elsevier, vol. 9(2), pages 207-247, April.
    7. Brenda Gannon & Robert Plasman & Francois Rycx & Ilan Tojerow, 2007. "Inter-Industry Wage Differentials and the Gender Wage Gap: Evidence from European Countries," The Economic and Social Review, Economic and Social Studies, vol. 38(1), pages 135-155.
    8. Barth, Erling & Moene, Karl O. & Willumsen, Fredrik, 2014. "The Scandinavian model—An interpretation," Journal of Public Economics, Elsevier, vol. 117(C), pages 60-72.
    9. Wolfgang Pollan, 2009. "How large are wage differentials in Austria?," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 36(4), pages 389-406, November.
    10. Eriksson, Stefan & Gottfries, Nils, 2005. "Ranking of job applicants, on-the-job search, and persistent unemployment," Labour Economics, Elsevier, vol. 12(3), pages 407-428, June.
    11. Joop Hartog & Pedro Pereira & José Vieira, 2000. "Inter-industry Wage Dispersion in Portugal," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 27(4), pages 353-364, December.
    12. Moene, Karl Ove & Wallerstein, Michael, 1997. "Pay Inequality," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages 403-430, July.
    13. Dhillon, Amrita & Petrakis, Emmanuel, 2002. "A generalised wage rigidity result," International Journal of Industrial Organization, Elsevier, vol. 20(3), pages 285-311, March.
    14. Gaston, N., 2000. "Unions and the Decentralisation of Collective Bargaining in a Globalising World," ISER Discussion Paper 0495, Institute of Social and Economic Research, Osaka University.
    15. Adriana Marshall, 1999. "Wage Determination Regimes and Pay Inequality: A comparative study of Latin American countries," International Review of Applied Economics, Taylor & Francis Journals, vol. 13(1), pages 23-39.


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