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Wage Bargaining Structure, Employment and Economic Integration

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  • Jean-Pierre DANTHINE
  • Jennifer HUNT

Abstract

It is widely believed that the integration of European economies will have little impact on labour mobility. This does not mean, however, that European labour markets will be unaffected by the process of economic integration. In this paper we show that with increased competition from closer economic integration, the hump-shaped pattern summarizing the relationship between economic performance and the degree of centralization in wage bargaining (Calmfors and Driffill, 1988) flattens out. As a consequence, the importance of the position of a particular economy on the wage-bargaining scale diminishes. We find, however, that the post-integration wage-price structure is closer to the configuration familiar to decentralized economies. It can be inferred that the adjustment to the new environment could be more difficult for economies characterized by centralized wage bargaining.
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Suggested Citation

  • Jean-Pierre DANTHINE & Jennifer HUNT, 1992. "Wage Bargaining Structure, Employment and Economic Integration," Cahiers de Recherches Economiques du Département d'économie 9204, Université de Lausanne, Faculté des HEC, Département d’économie.
    • Handle: RePEc:lau:crdeep:9204
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    Keywords

    wages; collective bargaining; economic integration;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • F15 - International Economics - - Trade - - - Economic Integration
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure

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