EconPapers    
Economics at your fingertips  
 

Bargained Wages, Wage Drift and the Design of the Wage Setting System

Pedro Portugal and Ana Rute Cardoso ()

Working Papers from Banco de Portugal, Economics and Research Department

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 data set on workers, firms and collective bargaining contracts in the Portuguese economy is used to analyze 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.

JEL-codes: D21 J31 J51 (search for similar items in EconPapers)
Date: 2003
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

Downloads: (external link)
https://www.bportugal.pt/sites/default/files/anexos/papers/wp200318.pdf

Related works:
Working Paper: Bargained Wages, Wage Drift and the Design of the Wage-Setting System (2004) Downloads
Working Paper: Bargained Wages, Wage Drift and the Design of the Wage Setting System (2003) Downloads
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:ptu:wpaper:w200318

Access Statistics for this paper

More papers in Working Papers from Banco de Portugal, Economics and Research Department Contact information at EDIRC.
Bibliographic data for series maintained by DEE-NTD ().

 
Page updated 2020-01-25
Handle: RePEc:ptu:wpaper:w200318