Pattern Bargaining as a Means to Coordinate Wages in the Nordic Countries

Lars Calmfors ()
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Lars Calmfors: Research Institute of Industrial Economics (IFN), Postal: and Institute for International Economic Studies, Stockholm University, https://www.ifn.se/en/researchers/ifn-researcher/lars-calmfors/

No 1517, Working Paper Series from Research Institute of Industrial Economics

Abstract: he various form of pattern bargaining with manufacturing, as representative of the tradables sector, deciding the norm for wage increases in the Nordic countries are reviewed. This form of bargaining has been consistent with strong international competitiveness and has widespread support among practitioners based on informal analysis. It is, however, hard to build a convincing case in more formal modelling for the idea that wage leadership for the tradables sector is particularly conducive to wage restraint. The conclusion is rather that it is norm setting in itself, irrespective of by whom it is done, that promotes wage moderation. In the future, when changing demograhics may motivate a reallocation of labour to welfare services, a rigid application of international competitiveness norms may imply an undesirable status-quo bias. More weight should probably be given to overall labour market conditions and more relative-wage flexibility allowed.

Keywords: Pattern bargaining; Coordination of wage setting; the Scandinavian model; Stackelberg leadership; Social norms; Labour reallocation (search for similar items in EconPapers)
JEL-codes: E24 J21 J51 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2025-01-14
New Economics Papers: this item is included in nep-lab
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