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The rise and fall of centralized wage bargaining

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  • Ortigueira, Salvador

Abstract

During the three decades spanning the early 50’s to the early 80’s, the wagesetting process in most Northern European countries was dominated by centralized bargaining, where peak level labor and employer associations set wages nationwide. In the early 80’s centralized wage bargaining began to collapse. In this paper we assess a novel explanation both for the initial establishment of a centralized wagesetting process, and for its subsequent collapse. According to our theory, centralized wage bargaining was set up as a response to the spillovers created by the unemployment benefit program. Its collapse was the result of the increase in the productivity gap across workers, brought about by equipment-specific technological progress and equipment-skill complementarity

Suggested Citation

  • Ortigueira, Salvador, 2011. "The rise and fall of centralized wage bargaining," UC3M Working papers. Economics we1129, Universidad Carlos III de Madrid. Departamento de Economía.
  • Handle: RePEc:cte:werepe:we1129
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    Cited by:

    1. Hirsch, Boris & Merkl, Christian & Müller, Steffen & Schnabel, Claus, 2014. "Centralized vs. Decentralized Wage Formation: The Role of Firms' Production Technology," IZA Discussion Papers 8242, Institute of Labor Economics (IZA).
    2. Finn Martensen, 2014. "Opposite Effects of Competition and Rents on Collective Bargaining – Evidence from Germany," Working Paper Series of the Department of Economics, University of Konstanz 2014-15, Department of Economics, University of Konstanz.
    3. Stamegna, Marco, 2022. "Wage inequality and induced innovation in a classical-Marxian growth model," MPRA Paper 113805, University Library of Munich, Germany.

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    More about this item

    Keywords

    Wage-Bargaining Arrangements;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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