Productivity and Wage Effects of Firm-Level Collective Agreements: Evidence from Belgian Linked Panel Data

Andrea Garnero, Francois Rycx and Isabelle Terraz

No 11568, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: How do firm-level collective agreements affect firm performance in a multi-level bargaining system? Using detailed Belgian linked employer-employee panel data, our findings show that firm agreements increase both wage costs and productivity (with respect to sector-level agreements). Relying on a recent approach developed by Bartolucci (2014), they also indicate that firm agreements exert a stronger impact on wages than on productivity, so that profitability is hampered. However, this rent-sharing effect only holds in manufacturing. In private sector services, the raw wage premium associated to firm agreements is entirely driven by compositional effects. Furthermore, estimates show that firm agreements lead to significantly more rent-sharing among firms operating in less competitive environments. Firm agreements are thus mainly found to raise wages beyond productivity when the rents to be shared between workers and firms are relatively big. Overall, this suggests that firm-level agreements benefit to both employers and employees – through higher productivity and wages – without being very detrimental to firms' performance.

Keywords: collective bargaining; productivity; labour costs; linked panel data (search for similar items in EconPapers)
JEL-codes: C33 J24 J31 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2018-05
New Economics Papers: this item is included in nep-bec, nep-eff, nep-hrm and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published - published in: British Journal of Industrial Relations, 2020, 58 (4), 936-972

Downloads: (external link)
https://docs.iza.org/dp11568.pdf (application/pdf)

Related works:
Journal Article: Productivity and Wage Effects of Firm‐Level Collective Agreements: Evidence from Belgian Linked Panel Data (2020)
Working Paper: Productivity and wage effects of firm-level collective agreements: Evidence from Belgian linked panel data (2019)
Working Paper: Productivity and wage effects of firm-level collective agreements: Evidence from Belgian linked panel data (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp11568

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
library@iza.org

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte (hinte@iza.org).