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

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  • McGuinness, Seamus

    (ESRI)

  • Kelly, Elish

    (ESRI)

  • O'Connell, Philip J.

    (ESRI)

Abstract

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.

Suggested Citation

  • McGuinness, Seamus & Kelly, Elish & O'Connell, Philip J., 2008. "The Impact of Wage Bargaining Regime on Firm-Level Competitiveness and Wage Inequality: The Case of Ireland," Papers WP266, Economic and Social Research Institute (ESRI).
  • Handle: RePEc:esr:wpaper:wp266
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Andréasson, Hannes, 2014. "The effect of decentralized wage bargaining on the structure of wages and firm performance," Ratio Working Papers 241, The Ratio Institute.
    2. Frank Walsh, 2013. "Labour Market Regulation and Migration in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 44(1), pages 85-102.
    3. Rycx, Francois & Saks, Yves & Tojerow, Ilan, 2016. "Misalignment of Productivity and Wages across Regions? Evidence from Belgian Matched Panel Data," IZA Discussion Papers 10336, Institute for the Study of Labor (IZA).
    4. repec:ilo:ilowps:480595 is not listed on IDEAS
    5. DAVIA, Maria A. & McGUINNESS, Seamus & O’CONNELL, Philip J., 2014. "Exploring The Role Of Labour Market Uncertainty In Explaining Differences In Rates Of Return To Education In Europe," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 14(3), pages 89-104.
    6. Philip O’Connell, 2013. "Cautious adjustment in a context of economic collapse: The public sector in the Irish crises," Chapters,in: Public Sector Shock, chapter 9, pages 337-370 Edward Elgar Publishing.
    7. Seamus McGuinness & Luis Ortiz, 2016. "Skill gaps in the workplace: measurement, determinants and impacts," Industrial Relations Journal, Wiley Blackwell, vol. 47(3), pages 253-278, May.
    8. Cronin, Hugh & McGuinness, Seamus, 2014. "Examining the Relationship between Employee Resistance to Changes in Job Conditions and Wider Organisational Change: Evidence from Ireland," Papers WP490, Economic and Social Research Institute (ESRI).
    9. Eoin O'Malley, 2012. "A Survey of Explanations for the Celtic Tiger Boom," The Institute for International Integration Studies Discussion Paper Series iiisdp417, IIIS.
    10. Regan, Aidan., 2013. "The impact of the eurozone crisis on Irish social partnership : a political economy analysis," ILO Working Papers 994805953402676, International Labour Organization.
    11. Kelly, Eilish & McGuinness, Seamus & O'Connell, Philip, 2009. "Benchmarking, Social Partnership and Higher Remuneration: Wage Settling Institutions and the Public-Private Sector Wage Gap in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 40(3), pages 339-370.
    12. Sebastian Dellepiane & Niamh Hardiman, 2011. "Governing the Irish Economy: A Triple Crisis," Working Papers 201103, Geary Institute, University College Dublin.

    More about this item

    Keywords

    Ireland/Labour Costs/Wage Bargaining Regimes/Wage Dispersion;

    JEL classification:

    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
    • J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy

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