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The Impact of Wage Bargaining Regime on Firm-Level Competitiveness and Wage Inequality: The Case of Ireland

  • McGuinness, Seamus

    (ESRI)

  • Kelly, Elish

    (ESRI)

  • O'Connell, Philip J.

    (ESRI)

This paper uses a linked employer-employee dataset to analyse the impact of institutional wage bargaining regimes on levels of average labour costs and within firm wage dispersion in private sector companies in Ireland. The results show that while centralised bargaining reduced labour costs within both the indigenous and foreign-owned sectors, the relative advantage was greater among foreign-owned firms. The analysis suggests that there are potentially large competitiveness gains to multinational companies that choose to locate in countries implementing a centralised bargaining system. Furthermore, the results provide additional support to the view that collective bargaining reduces within firm wage inequality.

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Paper provided by Economic and Social Research Institute (ESRI) in its series Papers with number WP266.

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Length: 38 pages
Date of creation: Dec 2008
Date of revision:
Handle: RePEc:esr:wpaper:wp266
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  18. Bradley, John & FitzGerald, John & McCoy, Daniel, 1991. "Medium-Term Review: 1991-1996, No. 4," Forecasting Report, Economic and Social Research Institute (ESRI), number MTR04, December.
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  24. Gerlach, Knut & Stephan, Gesine, 2005. "Wage distributions by wage-setting regime," IAB Discussion Paper 200509, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  25. Patrick Gunnigle & David McGuire, 2001. "Why Ireland? A Qualitative Review of the Factors Influencing the Location of US Multinationals in Ireland with Particular Reference to the Impact of Labour Issues," The Economic and Social Review, Economic and Social Studies, vol. 32(1), pages 43-67.
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