IDEAS home Printed from https://ideas.repec.org/p/rif/wpaper/118.html

The Effects of the Decentralization of Collective Bargaining on Wage Differences Among Employee Groups

Author

Listed:
  • Kauhanen, Antti

Abstract

Recently, Finnish forest industries shifted from sectoral collective bargaining to firm-level bargaining, and the IT services industry shifted to a hybrid of sector- and firm-level bargaining. These changes meant that all issues previously covered by sectoral agreements would now be negotiated at the firm level, which could lead to notable contract changes. A study previously published by ETLA showed that decentralization of bargaining had only modest impacts on the level and dispersion of wages. Of the groups examined, only for blue-collar workers in paper industries, decentralization led to higher wages and increased wage dispersion within firms. This study examines the effects of the transition to firm-level agreements on pay differences between different groups. Previous international research has shown that decentralization of the collective bargaining system can lead to an increase in the gender pay gap or to an increase in the pay gap between different educational groups. The results of the study show that in Finland, the move away from union-specific bargaining did not increase pay differences between different groups.

Suggested Citation

  • Kauhanen, Antti, 2024. "The Effects of the Decentralization of Collective Bargaining on Wage Differences Among Employee Groups," ETLA Working Papers 118, The Research Institute of the Finnish Economy.
    • Handle: RePEc:rif:wpaper:118
    as

    Download full text from publisher

    File URL: https://www.etla.fi/wp-content/uploads/ETLA-Working-Papers-118.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jelle Visser, 2016. "What happened to collective bargaining during the great recession?," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-35, December.
    2. Christian M. Dahl & Daniel le Maire & Jakob R. Munch, 2013. "Wage Dispersion and Decentralization of Wage Bargaining," Journal of Labor Economics, University of Chicago Press, vol. 31(3), pages 501-533.
    3. Anni Heikkilä & Hannu Piekkola, 2005. "Explaining the Desire for Local Bargaining: Evidence from a Finnish Survey of Employers and Employees," LABOUR, CEIS, vol. 19(2), pages 399-423, June.
    4. Antti Kauhanen & Terhi Maczulskij & Krista Riukula, 2024. "The incidence and effects of decentralized wage bargaining in Finland," Journal of Labor Research, Springer, vol. 45(2), pages 232-253, June.
    5. Damian Clarke & Daniel Paila~nir & Susan Athey & Guido Imbens, 2023. "Synthetic Difference In Differences Estimation," Papers 2301.11859, arXiv.org, revised Feb 2023.
    6. Dmitry Arkhangelsky & Susan Athey & David A. Hirshberg & Guido W. Imbens & Stefan Wager, 2021. "Synthetic Difference-in-Differences," American Economic Review, American Economic Association, vol. 111(12), pages 4088-4118, 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. Antti Kauhanen, 2024. "The effects of the decentralization of collective bargaining on wages and wage dispersion: Evidence from the Finnish forest and IT industries," British Journal of Industrial Relations, London School of Economics, vol. 62(2), pages 319-334, June.
    2. Kauhanen, Antti, 2023. "The Effects of the Decentralization of Collective Bargaining on Wages and Wage Dispersion: Evidence from the Finnish Forest and IT Industries," ETLA Working Papers 105, The Research Institute of the Finnish Economy.
    3. Maczulskij, Terhi & Haapanen, Mika & Kauhanen, Antti & Riukula, Krista, 2024. "Decentralized wage bargaining and health," Economics & Human Biology, Elsevier, vol. 55(C).
    4. Kauhanen, Antti & Maczulskij, Terhi & Riukula, Krista, 2020. "Heterogeneous Impacts of the Decentralization of Collective Bargaining," IZA Discussion Papers 13867, IZA Network @ LISER.
    5. Antti Kauhanen & Terhi Maczulskij & Krista Riukula, 2024. "The incidence and effects of decentralized wage bargaining in Finland," Journal of Labor Research, Springer, vol. 45(2), pages 232-253, June.
    6. Maczulskij, Terhi & Haapanen, Mika & Kauhanen, Antti & Riukula, Krista, 2021. "Dark Half: Decentralized Bargaining and Well-Being at Work," IZA Discussion Papers 14654, IZA Network @ LISER.
    7. Ramos, Raul & Sanromá, Esteban & Simón, Hipólito, 2022. "Collective bargaining levels, employment and wage inequality in Spain," Journal of Policy Modeling, Elsevier, vol. 44(2), pages 375-395.
    8. Hidalgo, Eduardo & Hornung, Erik & Selaya, Pablo, 2026. "NAFTA and drug-related violence in Mexico," Journal of Development Economics, Elsevier, vol. 181(C).
    9. Miteva, Daniela A. & Ellis, Edward A. & Ellis, Peter W. & Sills, Erin O. & Griscom, Bronson W. & Rodriguez-Ward, Dawn & Naples, Colette & Uematsu, Claire, 2025. "Community sawmills can save forests: Forest regrowth and avoided deforestation due to vertical integration of wood production in Mexican community forests," Ecological Economics, Elsevier, vol. 236(C).
    10. Duncan R. Hobbs & Michael R. Strain, 2026. "Do re‐employment bonuses increase employment? Evidence from the Idaho Return to Work Bonus programme," Economica, London School of Economics and Political Science, vol. 93(371), pages 887-912, July.
    11. Ramos, Raul & Sanromá, Esteban & Simón, Hipólito, 2018. "Wage Differentials by Bargaining Regime in Spain (2002-2014): An Analysis Using Matched Employer-Employee Data," IZA Discussion Papers 12013, IZA Network @ LISER.
    12. Kettlewell, Nathan & Gao, Tiannan, 2026. "Policy or Pandemic? Explaining the Rise in Young Adults' Private Health Insurance Take-Up in Australia," IZA Discussion Papers 18708, IZA Network @ LISER.
    13. Compagnoni, Marco & Torbert, Jane, 2026. "Environmental and economic effects of pay-as-you-throw waste taxation: An assessment based on difference-in-differences models," Ecological Economics, Elsevier, vol. 246(C).
    14. Seoyoung Kwon & Jongkwan Lee & Joan Monràs, 2026. "The Effect of Retaining High-Skilled International Graduates: Evidence from the STEM OPT Extension," Working Papers 1564, Barcelona School of Economics.
    15. Hottenrott, Hanna & Schaper, Thomas & Schwierzy, Julian, 2026. "Clusters of excellence and science spillovers to industry: Evidence from additive manufacturing," ZEW Discussion Papers 26-013, ZEW - Leibniz Centre for European Economic Research.
    16. Roberto Esposti, 2025. "Do rural development policy measures really affect farmers' behaviour and performance? A synthetic difference in differences estimation," Working Papers 494, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    17. Dench, Daniel & Pineda-Torres, Mayra & Myers, Caitlin, 2024. "The effects of post-Dobbs abortion bans on fertility," Journal of Public Economics, Elsevier, vol. 234(C).
    18. Cerqua, Augusto & Ferrante, Chiara & Letta, Marco, 2023. "Electoral earthquake: Local shocks and authoritarian voting," European Economic Review, Elsevier, vol. 156(C).
    19. Ege Aksu & Charles J. Courtemanche & Dhaval M. Dave & Daniel L. Dench & Michael Grossman & Jooyoung Kim & Selen Ozdogan & Shubhsri Rajendra & Joseph J. Sabia & Henry Saffer, 2025. "The Effect of Online Sales Bans on E-Cigarette Use," NBER Working Papers 34565, National Bureau of Economic Research, Inc.
    20. Adolfsen, Jakob Feveile & Heissel, Malte & Manu, Ana-Simona & Vinci, Francesca, 2024. "Burn now or never? Climate change exposure and investment of fossil fuel firms," Working Paper Series 2945, European Central Bank.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence

    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:rif:wpaper:118. 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: Kaija Hyvönen-Rajecki (email available below). General contact details of provider: https://edirc.repec.org/data/etlaafi.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.