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Wages and employment in a unionized economy: Practical implications of theoretical considerations in the context of Finland

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  • Tyrväinen, Timo

Abstract

This article evaluates the fundamental characteristics of Finnish labour markets. As the unionization rate in Finland is exceptionally high by international standards, a bargaining approach incorporating the unions' key role in wage setting is applied. An analysis is made of basic trends in those factors which theoretical considerations imply as being relevant. The "wedge" between product wages and after tax consumption wages is evaluated with special care. It is stated that the wedge cannot be claimed to be a key factor contributing to the unfavourable trends seen in Finnish labour markets since the late 1970s. It is also argued that collective incomes policy measures have contributed to shortening of the adjustment lags in labour markets at least in some relevant occasions.

Suggested Citation

  • Tyrväinen, Timo, 1988. "Wages and employment in a unionized economy: Practical implications of theoretical considerations in the context of Finland," Bank of Finland Research Discussion Papers 20/1988, Bank of Finland.
    • Handle: RePEc:zbw:bofrdp:rdp1988_020
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    References listed on IDEAS

    as
    1. Haaparanta, Pertti, 1988. "Customs unions and national budgets," Research Discussion Papers 18/1988, Bank of Finland.
    2. Skolnik, Amy, 1988. "The EC internal market: An "economic United States" of Europe," Bank of Finland Research Discussion Papers 19/1988, Bank of Finland.
    3. Åkerholm, Johnny, 1988. "External adjustment in small open economies : Some recent experience," Research Discussion Papers 6/1988, Bank of Finland.
    4. Tarkka, Juha & Willman, Alpo & Rasi, Chris-Marie, 1988. "Production and employment in the BOF4 quarterly model of the Finnish economy," Research Discussion Papers 14/1988, Bank of Finland.
    5. Lahti, Ari & Virén, Matti, 1988. "Rational expectations in a macromodel : Some comparative analyses with Finnish data," Research Discussion Papers 5/1988, Bank of Finland.
    6. Skolnik, Amy, 1988. "The EC internal market : An "economic United States" of Europe," Research Discussion Papers 19/1988, Bank of Finland.
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