Dark Half: Decentralized Bargaining and Well-being at Work

Terhi Maczulskij, Mika Haapanen, Antti Kauhanen () and Krista Riukula

No 89, ETLA Working Papers from The Research Institute of the Finnish Economy

Abstract: 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: 42 pages
Date: 2021-08-23
New Economics Papers: this item is included in nep-eur and nep-isf
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Working Paper: Dark Half: Decentralized Bargaining and Well-Being at Work (2021)
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