Dark Half: Decentralized Bargaining and Well-Being at Work

Terhi Maczulskij, Mika Haapanen, Antti Kauhanen () and Krista Riukula ()
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Krista Riukula: ETLA - The Research Institute of the Finnish Economy

No 14654, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Using information on collective agreements and administrative data on mental ill-health, sickness absence, and job separations, we study the effect of decentralization on well-being at work in Finland. Our regression results with individual-and firm-level fixed effects show that decentralized wage bargaining leads to distinct outcomes for different employee groups. For example, white-collar employees in white-collar intensive firms show increased well-being at work. In contrast, all employees in blue-collar intensive firms show quite strong and negative responses to decentralization. Decentralization affects mostly job-separation behavior and mental ill-health, whereas no consistent effects for sickness absence are observed. Whether the mechanisms between decentralization and worker's well-being is explained by pay dispersion, wage level, or different preferences toward wage policy needs to be explored further.

Keywords: decentralization; collective agreements; mental health disorder; sickness absence; job separation; blue-collar; white-collar (search for similar items in EconPapers)
JEL-codes: J31 J51 J52 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2021-08
New Economics Papers: this item is included in nep-hea, nep-isf and nep-lab
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Working Paper: Dark Half: Decentralized Bargaining and Well-being at Work (2021)
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