Bargained Wages, Wage Drift and the Design of the Wage-Setting System
Ana Rute Cardoso and
Pedro Portugal ()
No 4405, CEPR Discussion Papers from C.E.P.R. Discussion Papers
Abstract:
This Paper aims at answering the question: how does a typically 'European' bargaining system ? with collective bargaining, extension mechanisms and national minimum wage ? coexist with low unemployment rate and high wage flexibility? A unique dataset on workers, firms and collective bargaining contracts in the Portuguese economy is used to analyse the determinants of both the bargained wage and the wage drift. Results indicate that wage drift stretches the returns to every worker and firm attribute, whereas it shrinks the returns to union bargaining power. Therefore, firm-specific arrangements, in the form of wage drift, partly offset collective bargaining, granting firms a high degree of freedom when setting wages. Union bargaining power raises the overall wage level, but lowers the returns on worker attributes, an outcome of the egalitarian policy pursued.
Keywords: Wage distribution; Wage drift; Union bargaining power; Employer coordination (search for similar items in EconPapers)
JEL-codes: D21 J31 J51 (search for similar items in EconPapers)
Date: 2004-06
References: Add references at CitEc
Citations: View citations in EconPapers (6)
Downloads: (external link)
https://cepr.org/publications/DP4405 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
Related works:
Working Paper: Bargained Wages, Wage Drift and the Design of the Wage Setting System (2003) 
Working Paper: Bargained Wages, Wage Drift and the Design of the Wage Setting System (2003) 
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:cpr:ceprdp:4405
Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP4405
Access Statistics for this paper
More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().