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Collective Agreements, Wages and Restructuring in Transition

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  • Iga Magda
  • David Marsden
  • Simone Moriconi

Abstract

Using a large matched employer-employee dataset, the authors investigate the relationship between collective agreements, wages and restructuring in transition in three former centrally planned economies (Czech Republic, Hungary and Poland). They adopt a natural experiment approach and capture the restructuring process triggered by the launch of transition by means of cohort effects among firms founded before or at different stages of this process which enable them to control for the heterogeneity of firms in different cohorts. They find that the wage premium associated with different levels of collective agreements depends on restructuring and its timing in the transition. In early-middle transition firms, industry level agreements protect low skilled wages; whereas in late transition ones, firm level agreements increase medium and especially high skilled wages. Some cross country differences emerge in the structure of the wage premium as a result of country specific features of restructuring.

Suggested Citation

  • Iga Magda & David Marsden & Simone Moriconi, 2009. "Collective Agreements, Wages and Restructuring in Transition," CEP Discussion Papers dp0959, Centre for Economic Performance, LSE.
  • Handle: RePEc:cep:cepdps:dp0959
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    More about this item

    Keywords

    Collective agreements; wages; transition economy; restructuring;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • P2 - Economic Systems - - Socialist Systems and Transition Economies

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