Heterogeneous Impacts of the Decentralization of Collective Bargaining

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

No 13867, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper analyses the heterogeneous effects of the decentralization of collective bargaining on the incidence of wage increases and wage dispersion in Finland. We use linked employer-employee panel data for the 2005-2013 period, which includes major changes in bargaining systems and economic conditions. Our regression results from models with high-dimensional individual and firm fixed effects show that decentralized bargaining leads to very different outcomes for blue- and white-collar employees. Decentralized bargaining decreases wage dispersion among blue-collar employees and slightly increases it among white-collar employees. Decentralization also affects the incidence of wage increases differently for blue- and white-collar employees. We argue that these differences reflect the different preferences of the employee groups. We also show that the fallback option in local negotiations affects the decentralization outcomes.

Keywords: wage dispersion; decentralization; collective agreements; wage bargaining; wage increase (search for similar items in EconPapers)
JEL-codes: J31 J51 J52 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2020-11
New Economics Papers: this item is included in nep-lab and nep-ure
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Citations: View citations in EconPapers (8)

Published - published online as 'The incidence and effects of decentralized wage bargaining in Finland' in: Journal of Labor Research , 5 April 2024

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Working Paper: Heterogeneous Impacts of the Decentralization of Collective Bargaining (2020)
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