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The outcome of individual wage bargaining and the influence of managers' bargaining power: evidence from union data

  • Granqvist, Lena

    ()

    (Swedish Confederation of Professional Associations (SACO))

  • Regnér, Håkan

    ()

    (Swedish Confederation of Professional Associations (SACO))

Registered author(s):

    We analyze unique data that identify whether individuals have participated in decentralized wage setting and whether they have negotiated their own wages. Wages are significantly higher for those who have been part of a formalized wage-setting process compared with non-participants, but only in the public sector. Employees who negotiate their own wages have higher wages than non-negotiators. Wages are also significantly higher for those who negotiate with a manager who has the power to set wages, compared with those who negotiate with a manager who has no power over wages. This concerns employees in the public and the private sectors. Quantile regression results reveal that the outcome of individual bargaining increases over the wage distribution. Percentile wage differences are significant only among workers who negotiate with a manager who has the power to set wages. Estimated wage differences between negotiators and non-negotiators are 4.6% on average, 5.6% in the 90th percentile, and 2.3% at the 10th percentile.

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    Paper provided by Swedish Institute for Social Research in its series Working Paper Series with number 3/2006.

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    Length: 24 pages
    Date of creation: 08 May 2006
    Date of revision:
    Handle: RePEc:hhs:sofiwp:2006_003
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    1. Blau, Francine D & Kahn, Lawrence M, 1996. "International Differences in Male Wage Inequality: Institutions versus Market Forces," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 791-836, August.
    2. repec:ese:iserwp:2003-23 is not listed on IDEAS
    3. Arulampalam, Wiji & Booth, Alison L. & Bryan, Mark L., 2003. "Training in Europe," IZA Discussion Papers 933, Institute for the Study of Labor (IZA).
    4. Katz, Lawrence F. & Autor, David H., 1999. "Changes in the wage structure and earnings inequality," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 26, pages 1463-1555 Elsevier.
    5. repec:cup:cbooks:9780521576475 is not listed on IDEAS
    6. Levine, David, 1989. "Cohesiveness, Productivity, and Wage Dispersion," Institute for Research on Labor and Employment, Working Paper Series qt8kd4d0p4, Institute of Industrial Relations, UC Berkeley.
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