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Rent-Sharing under Different Bargaining Regimes: Evidence from Linked Employer-Employee Data

  • Rusinek, Michael

    ()

    (ECARES, Free University of Brussels)

  • Rycx, Francois

    ()

    (Free University of Brussels)

In many European countries, the majority of workers have their wages directly defined by industry-level agreements. In addition, for some workers, industry agreements are complemented by firm-specific agreements. Yet, the relative importance of firm and industry agreements (in other words, the degree of centralization) differs drastically across industries. The authors of this paper use unique linked employer-employee data from a 2003 survey in Belgium to examine how these bargaining features affect the extent of rent-sharing. Their results show that there is substantially more rent-sharing in decentralized than in centralized industries, even when controlling for the endogeneity of profits, for heterogeneity among workers and firms and for differences in characteristics between bargaining regimes. Moreover, in centralized industries, rent-sharing is found only for workers that are covered by a firm agreement. Finally, results indicate that within decentralized industries, both firm and industry bargaining generate rent-sharing to the same extent.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3406.

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Length: 40 pages
Date of creation: Mar 2008
Date of revision:
Publication status: published in: British Journal of Industrial Relations, 2013, 51 (1), 28-58
Handle: RePEc:iza:izadps:dp3406
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