Gender Equality Bargaining: Evidence from Finland

This paper studies whether collective bargaining can reduce gender inequality through targeted wage increases. We examine the Finnish equality allowance, a small contractual wage component corresponding to a wage increase of up to 0.5 percent, introduced in the 2005 comprehensive agreement and implemented in collective agreements in 2006. Using worker-level earnings data linked to collective agreements, we estimate its effects with difference-in-differences methods robust to heterogeneous treatment effects. Equality allowances were more commonly applied in more female-dominated sectors and occupations. Our preferred analysis focuses on the private-sector agreements, where some agreements introduced an equality allowance and others did not. We find no statistically significant effects on hourly earnings, working hours, or employer mobility. However, subgroup analyses provide some evidence of reduced working hours among low-wage women. The findings suggest that a small equality-oriented wage component was insufficient to produce detectable wage gains for women or narrow the gender wage gap, with point estimates consistent with partial offsetting through other components of the contractual settlement.