Productivity and wage effects of firm-level collective agreements: Evidence from Belgian linked panel data

Andrea Garnero, Francois Rycx and Isabelle Terraz

No 223, OECD Social, Employment and Migration Working Papers from OECD Publishing

Abstract: How do firm-level collective agreements affect firm performance in a multi-level bargaining system? Using detailed Belgian linked employer-employee panel data, our findings show that firm agreements increase both wage costs and labour productivity (with respect to sector-level agreements). Relying on a recent approach developed by Bartolucci (2014), they also indicate that firm agreements exert a stronger impact on wages than on productivity, so that on average profitability is hampered. However, this rent-sharing effect only holds in sectors where firms are more concentrated. Firm agreements are thus mainly found to raise wages beyond labour productivity when the rents to be shared between workers and firms are relatively big. Overall, this suggests that firm-level agreements benefit both employers and employees – through higher productivity and wages – without being detrimental to firms’ gross profits.

JEL-codes: C33 J24 J31 (search for similar items in EconPapers)
Date: 2019-02-11
New Economics Papers: this item is included in nep-bec, nep-eff, nep-eur and nep-lma
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https://doi.org/10.1787/132aa88e-en (text/html)

Related works:
Journal Article: Productivity and Wage Effects of Firm‐Level Collective Agreements: Evidence from Belgian Linked Panel Data (2020)
Working Paper: Productivity and Wage Effects of Firm-Level Collective Agreements: Evidence from Belgian Linked Panel Data (2018)
Working Paper: Productivity and wage effects of firm-level collective agreements: Evidence from Belgian linked panel data (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:oec:elsaab:223-en

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