IDEAS home Printed from https://ideas.repec.org/p/ico/wpaper/58.html

How to explain Wage Growth Slowdown in Austria? A sectoral-panel analysis of collectively bargained minimum wages

Author

Listed:
  • Philipp Gerhartinger

    (Department for Economic, Welfare and Social Policy, Chamber of Labour, Linz, Austria)

  • Philipp Haunschmid

    (Department for Economic, Welfare and Social Policy, Chamber of Labour, Linz, Austria)

  • Dennis Tamesberger

    (Department for Economic, Welfare and Social Policy, Chamber of Labour, Linz, Austria)

Abstract

This paper studies the relationship between union power, unemployment and wages. We find many theoretically well-established links suggesting that unemployment negatively affects bargaining power. As an empirical strategy we use Austrian data from 1966 until 2015 on the development of collectively bargained minimum wages. Such data directly reflects the result of a bargaining process between unions and employer organizations, and enables to show the link between bargaining power and unemployment. Moreover, it allows for further discussion on the potential influence of other macroeconomic and institutional variables, such as trade openness and union density.

Suggested Citation

  • Philipp Gerhartinger & Philipp Haunschmid & Dennis Tamesberger, 2017. "How to explain Wage Growth Slowdown in Austria? A sectoral-panel analysis of collectively bargained minimum wages," ICAE Working Papers 58, Johannes Kepler University, Institute for Comprehensive Analysis of the Economy.
    • Handle: RePEc:ico:wpaper:58
    as

    Download full text from publisher

    File URL: https://www.jku.at/fileadmin/gruppen/108/ICAE_Working_Papers/wp58.pdf
    File Function: First version, 2017
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Engelbert Stockhammer, 2009. "Determinants of functional income distribution in OECD countries," IMK Studies 05-2009, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    2. Soskice, David, 1990. "Wage Determination: The Changing Role of Institutions in Advanced Industrialized Countries," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 6(4), pages 36-61, Winter.
    3. Rothschild, Kurt W., 2002. "The absence of power in contemporary economic theory," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 31(5), pages 433-442.
    4. Paul Gregg & Stephen Machin & Mariña Fernández‐Salgado, 2014. "Real Wages and Unemployment in the Big Squeeze," Economic Journal, Royal Economic Society, vol. 0(576), pages 408-432, May.
    5. David Card, 2001. "The Effect of Unions on Wage Inequality in the U.S. Labor Market," ILR Review, Cornell University, ILR School, vol. 54(2), pages 296-315, January.
    6. Olivier Blanchard & Francesco Giavazzi, 2003. "Macroeconomic Effects of Regulation and Deregulation in Goods and Labor Markets," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(3), pages 879-907.
    7. Engelbert Stockhammer, 2008. "Is The Nairu Theory A Monetarist, New Keynesian, Post Keynesian Or A Marxist Theory?," Metroeconomica, Wiley Blackwell, vol. 59(3), pages 479-510, July.
    8. Ralph Ossa, 2014. "Trade Wars and Trade Talks with Data," American Economic Review, American Economic Association, vol. 104(12), pages 4104-4146, December.
    9. Bernhard Ebbinghaus & Jelle Visser, 1998. "When Institutions Matter: Union Growth and Decline in Western Europe, 1950-95," MZES Working Papers 30, MZES.
    10. Christopher A. Pissarides, 2000. "Equilibrium Unemployment Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262161877, December.
    11. Markus Knell & Alfred Stiglbauer, 2012. "Reference Norms, Staggered Wages, And Wage Leadership: Theoretical Implications And Empirical Evidence," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 53(2), pages 569-592, May.
    12. Richard B. Freeman & Lawrence F. Katz, 1995. "Differences and Changes in Wage Structures," NBER Books, National Bureau of Economic Research, Inc, number free95-1.
    13. Hartmut Egger & Udo Kreickemeier, 2017. "Fairness, Trade, and Inequality," World Scientific Book Chapters, in: International Trade and Labor Markets Welfare, Inequality and Unemployment, chapter 12, pages 339-380, World Scientific Publishing Co. Pte. Ltd..
    14. David G. Blanchflower & Andrew Oswald, 1995. "International Wage Curves," NBER Chapters, in: Differences and Changes in Wage Structures, pages 145-174, National Bureau of Economic Research, Inc.
    15. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-444, June.
    16. Freeman, Richard B. & Katz, Lawrence F. (ed.), 1995. "Differences and Changes in Wage Structures," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226261607, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Barth, Erling & Bratsberg, Bernt & Naylor, Robin A. & Raaum, Oddbjørn, 2002. "Explaining Variations in Wage Curves: Theory and Evidence," Memorandum 03/2002, Oslo University, Department of Economics.
    2. Richard B. Freeman, 2007. "Labor Market Institutions Around the World," NBER Working Papers 13242, National Bureau of Economic Research, Inc.
    3. Maarten Dossche & Andrea Gavazzi & Vivien Lewis, 2023. "Labor Adjustment and Productivity in the OECD," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 47, pages 111-130, January.
    4. Uwe Jirjahn & Kornelius Kraft, 2010. "Teamwork And Intra‐Firm Wage Dispersion Among Blue‐Collar Workers," Scottish Journal of Political Economy, Scottish Economic Society, vol. 57(4), pages 404-429, September.
    5. Olivier Blanchard & Lawrence F. Katz, 1997. "What We Know and Do Not Know about the Natural Rate of Unemployment," Journal of Economic Perspectives, American Economic Association, vol. 11(1), pages 51-72, Winter.
    6. Dennis J. Snower, 1998. "Causes of changing earnings inequality," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 69-133.
    7. Mohamed Amara & Wajih Khallouli & Faicel Zidi, 2024. "Public–private wage differentials in Tunisia: Consistency and decomposition," LABOUR, CEIS, vol. 38(3), pages 295-330, September.
    8. Lutz Bellmann & Uwe Blien, 2001. "Wage Curve Analyses of Establishment Data from Western Germany," ILR Review, Cornell University, ILR School, vol. 54(4), pages 851-863, July.
    9. Alessia Matano & Paolo Naticchioni & Francesco Vona, 2019. "“The Institutional Adjustment Margin to Import Competition: Evidence from Italian Minimum Wages”," IREA Working Papers 201905, University of Barcelona, Research Institute of Applied Economics, revised Apr 2019.
    10. Michel-Pierre Chélini & Georges Prat, 2019. "Verständnis der langfristigen Dynamik von Arbeitslosigkeit und Löhnen in Frankreich [Understanding the Long Run Dynamics of French Unemployment and Wages]," Post-Print hal-04400810, HAL.
    11. Xinmeng Li & Dao-Zhi Zeng, 2022. "Frictional unemployment, bargaining, and agglomeration," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 68(1), pages 151-179, February.
    12. Susan Hayter & Bradley Weinberg, 2011. "Mind the Gap: Collective Bargaining and Wage Inequality," Chapters, in: Susan Hayter (ed.), The Role of Collective Bargaining in the Global Economy, chapter 6, Edward Elgar Publishing.
    13. Wolfgang Pollan, 2004. "Zur Frage der Lohnführerschaft in Österreich," WIFO Monatsberichte (monthly reports), WIFO, vol. 77(3), pages 197-211, March.
    14. Castle, Jennifer L. & Hendry, David F., 2009. "The long-run determinants of UK wages, 1860-2004," Journal of Macroeconomics, Elsevier, vol. 31(1), pages 5-28, March.
    15. Gabriel J. Felbermayr & Mario Larch & Wolfgang Lechthaler, 2013. "Unemployment in an Interdependent World," American Economic Journal: Economic Policy, American Economic Association, vol. 5(1), pages 262-301, February.
    16. Olivier L’Haridon & Franck Malherbet, 2009. "Politiques du marché du travail et négociations par branches d'activité dans un modèle d'appariement," Recherches économiques de Louvain, De Boeck Université, vol. 75(2), pages 183-228.
    17. Gil Mehrez & Natacha Valla, 1998. "EMU: What if the Shocks are in the Labor Markets?," International Finance 9803001, University Library of Munich, Germany.
    18. Winfried Koeniger & Marco Leonardi & Luca Nunziata, 2007. "Labor Market Institutions and Wage Inequality," ILR Review, Cornell University, ILR School, vol. 60(3), pages 340-356, April.
    19. Wolfgang Pollan, 2004. "Austrian Exceptionalism. Labour Market Institutions and Wage Disparity," WIFO Studies, WIFO, number 25130.
    20. Åsa Rosén & Etienne Wasmer, 2005. "Higher Education Levels, Firms’ Outside Options and the Wage Structure," LABOUR, CEIS, vol. 19(4), pages 621-654, December.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ico:wpaper:58. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Teresa Griesebner The email address of this maintainer does not seem to be valid anymore. Please ask Teresa Griesebner to update the entry or send us the correct address (email available below). General contact details of provider: https://edirc.repec.org/data/igjkuat.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.