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Wages and the Bargaining Regime under Multi-level Bargaining: Belgium, Denmark and Spain

  • Plasman, Robert

    ()

    (Free University of Brussels)

  • Rusinek, Michael

    ()

    (ECARES, Free University of Brussels)

  • Rycx, Francois

    ()

    (Free University of Brussels)

Using a unique harmonized matched employer-employee dataset (European Structure of Earnings Survey, 1995), we study the impact of the regime of collective bargaining on wages in the manufacturing sector of three countries that are characterized by a multi-level system of bargaining: Belgium, Denmark and Spain. Our findings show that, compared to multi-employer bargaining, single-employer bargaining has a positive effect both on wage levels and on wage dispersion in Belgium and in Denmark. In Spain, single-employer bargaining also increases wage levels but reduces wage dispersion. Our interpretation is that in Belgium and Denmark, single-employer bargaining is used to adapt pay to the specific needs of the firm while, in Spain, it is mainly used by trade unions in order to compress the wage distribution.

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File URL: http://ftp.iza.org/dp1990.pdf
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1990.

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Length: 23 pages
Date of creation: Mar 2006
Date of revision:
Publication status: published in: European Journal of Industrial Relations, 2007, 13 (2), 161-180
Handle: RePEc:iza:izadps:dp1990
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  1. Stewart, Mark B, 1986. "Collective Bargaining Arrangements Closed Shops and Relative Pay," The Warwick Economics Research Paper Series (TWERPS) 273, University of Warwick, Department of Economics.
  2. Juan Francisco Canal Domínguez & César Rodríguez Gutiérrez, 2004. "Collective Bargaining and Within-firm Wage Dispersion in Spain," British Journal of Industrial Relations, London School of Economics, vol. 42(3), pages 481-506, 09.
  3. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May.
  4. Richard B. Freeman, 1978. "Unionism and the Dispersion of Wages," NBER Working Papers 0248, National Bureau of Economic Research, Inc.
  5. Thomas Lemieux, 2002. "Decomposing changes in wage distributions: a unified approach," Canadian Journal of Economics, Canadian Economics Association, vol. 35(4), pages 646-688, November.
  6. Carlos Garcia-Serrano & Miguel A. Malo, 2002. "Worker Turnover, Job Turnover and Collective Bargaining in Spain," British Journal of Industrial Relations, London School of Economics, vol. 40(1), pages 69-85, 03.
  7. Ana Rute Cardoso & Pedro Portugal, 2003. "Bargained Wages, Wage Drift and the Design of the Wage Setting System," Working Papers w200318, Banco de Portugal, Economics and Research Department.
  8. Checchi, Daniele & Pagani, Laura, 2004. "The Effects of Unions on Wage Inequality: The Italian Case in the 1990s," IZA Discussion Papers 1385, Institute for the Study of Labor (IZA).
  9. Joop Hartog & Edwin Leuven & Coen N. Teulings, 2000. "Wages and the Bargaining Regime in a Corporist Setting: The Netherlands," Tinbergen Institute Discussion Papers 00-013/3, Tinbergen Institute.
  10. Diego R.PALENZUELA & Juan F.JIMENO, 1996. "Wage Drift in Collective Bargaining at the Firm Level: Evidence from Spain," Annales d'Economie et de Statistique, ENSAE, issue 41-42, pages 187-206.
  11. repec:cup:cbooks:9780521590730 is not listed on IDEAS
  12. Rodriguez-Gutierrez, Cesar, 2001. "Wage dispersion within firms and collective bargaining in Spain," Economics Letters, Elsevier, vol. 72(3), pages 381-386, September.
  13. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-64, October.
  14. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June.
  15. Dell'Aringa, Carlo & Lucifora, Claudio, 1994. "Collective bargaining and relative earnings in Italy," European Journal of Political Economy, Elsevier, vol. 10(4), pages 727-747, December.
  16. Hibbs, Douglas Jr. & Locking, Hakan, 1996. "Wage compression, wage drift and wage inflation in Sweden," Labour Economics, Elsevier, vol. 3(2), pages 109-141, September.
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