European wage coordination; nightmare or dream to come true? An economic analysis of wage bargaining institutions in the EU
This paper analyses recent trends in wage bargaining institutions in Europe to explain the gradual deterioration in the bargaining position of trade unions. It appears that the integration of European economies is an important factor. This raises the question whether trade unions will respond by coordinating their wages internationally. Our conjecture is that the opportunities for wage coordination are not very strong. This is because of the numerous obstacles associated with heterogenous structures in wage setting in the EU. Softer coordination, e.g. in the form of information exchange or agreements on common rules in wage setting, is more likely to occur and has already been introduced in some cases. If stronger forms of international wage coordination would take off, perhaps in the longer term, this would strengthen the bargaining power of trade unions relative to firms. The implications for equilibrium unemployment are ambiguous. On the one hand, higher bargaining power raises wages and thereby unemployment. On the other hand, it reduces unemployment by better incorporating the response of the ECB to wage demands. Another consequence of stronger forms of international wage coordination may be that the absorption of asymmetric shocks in the EMU gets more problematic. In that case, wage coordination may turn into a nightmare as it hampers a crucial stabilisation mechanism in the EMU.
|Date of creation:||Mar 2003|
|Date of revision:|
|Contact details of provider:|| Postal: Postbus 80510, 2508 GM Den Haag|
Phone: (070) 338 33 80
Fax: (070) 338 33 50
Web page: http://www.cpb.nl/
More information through EDIRC
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.:
- Richard Layard & Stephen Nickell, 1998.
"Labour Market Institutions and Economic Performance,"
CEP Discussion Papers
dp0407, Centre for Economic Performance, LSE.
- Nickell, Stephen & Layard, Richard, 1999. "Labor market institutions and economic performance," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 46, pages 3029-3084 Elsevier.
- Nickell, S. & Layard, R., 1997. "Labour Market Institutions and Economic Performance," Papers 23, Centre for Economic Performance & Institute of Economics.
- Jeffrey A. Frankel & Andrew K. Rose, 1996.
"The Endogeneity of the Optimum Currency Area Criteria,"
NBER Working Papers
5700, National Bureau of Economic Research, Inc.
- Frankel, Jeffrey A & Rose, Andrew K, 1998. "The Endogeneity of the Optimum Currency Area Criteria," Economic Journal, Royal Economic Society, vol. 108(449), pages 1009-25, July.
- Frankel, Jeffrey A & Rose, Andrew K, 1996. "The Endogeneity of the Optimum Currency Area Criteria," CEPR Discussion Papers 1473, C.E.P.R. Discussion Papers.
- BORGHIJS, Alain & DU CAJU, Philip, 1999. "EMU and European trade union cooperation," Working Papers 1999013, University of Antwerp, Faculty of Applied Economics.
- repec:ese:iserwp:2003-23 is not listed on IDEAS
- Danthine, Jean-Pierre & Hunt, Jennifer, 1994.
"Wage Bargaining Structure, Employment and Economic Integration,"
Royal Economic Society, vol. 104(424), pages 528-41, May.
- Danthine, Jean-Pierre & Hunt, Jennifer, 1992. "Wage Bargaining Structure, Employment and Economic Integration," CEPR Discussion Papers 694, C.E.P.R. Discussion Papers.
- Jean-Pierre DANTHINE & Jennifer HUNT, 1992. "Wage Bargaining Structure, Employment and Economic Integration," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 9204, Université de Lausanne, Faculté des HEC, DEEP.
- Naylor, Robin, 1998. "International trade and economic integration when labour markets are generally unionised," European Economic Review, Elsevier, vol. 42(7), pages 1251-1267, July.
- Lippi, Francesco, 1999. "Strategic Monetary Policy with Non-Atomistic Wage Setters: A Case for Non-Neutrality," CEPR Discussion Papers 2218, C.E.P.R. Discussion Papers.
- A. Lans Bovenberg & Johan J. Graafland & Ruud A. de Mooij, 1998.
"Tax Reform and the Dutch Labor Market: An Applied General Equilibrium Approach,"
NBER Working Papers
6693, National Bureau of Economic Research, Inc.
- Bovenberg, A. Lans & Graafland, Johan J. & de Mooij, Ruud A., 2000. "Tax reform and the Dutch labor market: an applied general equilibrium approach," Journal of Public Economics, Elsevier, vol. 78(1-2), pages 193-214, October.
- Bovenberg, A.L. & Graafland, J.J. & de Mooij, R.A., 2000. "Tax reform and the Dutch labour market : An applied general equilibrium approach," Other publications TiSEM a22f887a-ce1a-4aa2-ad01-6, Tilburg University, School of Economics and Management.
- Bovenberg, A Lans & de Mooij, Ruud A & Graafland, Johan J, 1998. "Tax Reform and the Dutch Labour Market: An Applied General Equilibrium Approach," CEPR Discussion Papers 1983, C.E.P.R. Discussion Papers.
- Alain Serres & Stefano Scarpetta & Christine Maisonneuve, 2001. "Falling Wage Shares in Europe and the United States: How Important is Aggregation Bias?," Empirica, Springer, vol. 28(4), pages 375-401, December.
- Coricelli, Fabrizio & Cukierman, Alex & Dalmazzo, Alberto, 2000.
"Monetary Institutions, Monopolistic Competition, Unionized Labour Markets And Economic Performance,"
CEPR Discussion Papers
2407, C.E.P.R. Discussion Papers.
- Fabrizio Coricelli & Alex Cukierman & Alberto Dalmazzo, 2006. "Monetary Institutions, Monopolistic Competition, Unionized Labor Markets and Economic Performance," Scandinavian Journal of Economics, Wiley Blackwell, vol. 108(1), pages 39-63, 03.
- Wiji Arulampalam & Alison L. Booth & Mark L. Bryan, 2004.
"Training in Europe,"
Journal of the European Economic Association,
MIT Press, vol. 2(2-3), pages 346-360, 04/05.
- Teulings,Coen & Hartog,Joop, 1998.
"Corporatism or Competition?,"
Cambridge University Press, number 9780521590730, 1.
- Gruner, Hans Peter & Hefeker, Carsten, 1999. " How Will EMU Affect Inflation and Unemployment in Europe?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 101(1), pages 33-47, March.
- Naylor, Robin, 1999.
"Union Wage Strategies and International Trade,"
Royal Economic Society, vol. 109(452), pages 102-25, January.
- Naylor, Robin, 1997. "Union Wage Strategies and International Trade," The Warwick Economics Research Paper Series (TWERPS) 480, University of Warwick, Department of Economics.
- Lars Calmfors, 2001. "Wages and Wage-Bargaining Institutions in the Emu : A Survey of the Issues," CESifo Working Paper Series 520, CESifo Group Munich.
- Wolfgang Ochel, 2001. "Collective Bargaining Coverage in the OECD from the 1960s to the 1990s," CESifo Forum, Ifo Institute for Economic Research at the University of Munich, vol. 2(4), pages 62-65, 02.
- 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.
- Siebert, Horst, 1998. "The Euro: A dozen do's and don't's," Kiel Discussion Papers 312, Kiel Institute for the World Economy (IfW).
- Soskice, David, 1990. "Wage Determination: The Changing Role of Institutions in Advanced Industrialized Countries," Oxford Review of Economic Policy, Oxford University Press, vol. 6(4), pages 36-61, Winter.
- Driffill, John & van der Ploeg, Frederick, 1995. " Trade Liberalization with Imperfect Competition in Goods and Labour Markets," Scandinavian Journal of Economics, Wiley Blackwell, vol. 97(2), pages 223-43, June.
- Caballero, R.J. & Hammour, M.L., 1997.
"Jobless Growth: Appropriability, Factor-Substitution, and Unemployment,"
97-18, Massachusetts Institute of Technology (MIT), Department of Economics.
- Caballero, Ricardo J. & Hammour, Mohamad L., 1998. "Jobless growth: appropriability, factor substitution, and unemployment," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 48(1), pages 51-94, June.
- Ricardo J. Caballero & Mohamad L. Hammour, 1997. "Jobless Growth: Appropriability, Factor Substitution, and Unemployment," NBER Working Papers 6221, National Bureau of Economic Research, Inc.
- Huizinga, Harry, 1993.
" International Market Integration and Union Wage Bargaining,"
Scandinavian Journal of Economics,
Wiley Blackwell, vol. 95(2), pages 249-55.
- Huizinga, H.P., 1993. "International market integration and union wage bargaining," Other publications TiSEM 567712dd-8f03-40d8-8428-c, Tilburg University, School of Economics and Management.
- Guzzo, Vincenzo & Velasco, Andres, 1999. "The case for a populist Central Banker," European Economic Review, Elsevier, vol. 43(7), pages 1317-1344, June.
- Driffill, John & van der Ploeg, Frederick, 1993. "Monopoly Unions and the Liberalisation of International Trade," Economic Journal, Royal Economic Society, vol. 103(417), pages 379-85, March.
- George A. Akerlof & Andrew K. Rose & Janet L. Yellen & Helga Hessenius, 1991. "East Germany in from the Cold: The Economic Aftermath of Currency Union," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 1-106.
- Hall, Peter A. & Franzese, Robert J., 1998. "Mixed Signals: Central Bank Independence, Coordinated Wage Bargaining, and European Monetary Union," International Organization, Cambridge University Press, vol. 52(03), pages 505-535, June.
- Lars Calmfors, 1993. "Centralisation of Wage Bargaining and Macroeconomic Performance: A Survey," OECD Economics Department Working Papers 131, OECD Publishing.
- Heijdra, Ben J., 2009. "Foundations of Modern Macroeconomics," OUP Catalogue, Oxford University Press, edition 2, number 9780199210695, July.
When requesting a correction, please mention this item's handle: RePEc:cpb:discus:17. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.