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Collective Agreements, Wages, and Firms' Cohorts: Evidence from Central Europe

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  • Iga Magda
  • David Marsden
  • Simone Moriconi

Abstract

Using a large, matched employer-employee data set, the authors investigate the impact of company and industry collective bargaining agreements on wages in the Czech Republic, Hungary, and Poland (CE3). They also examine the changing characteristics of the union wage premium in different cohorts of establishments. Their results challenge the common idea of weak unions in the CE3 by revealing a union wage premium whose characteristics depend on the level at which collective bargaining occurs. They find that industry agreements increase wages for low-skilled workers, while company agreements increase medium- and high-skilled wages. Their second finding is that the union wage premium is unevenly distributed between cohorts, with substantial cross-country variation. Wage premiums are concentrated in the transitional cohorts in the Czech Republic and Poland and, to a lesser extent, in the pre-transitional cohort in Hungary.

Suggested Citation

  • Iga Magda & David Marsden & Simone Moriconi, 2012. "Collective Agreements, Wages, and Firms' Cohorts: Evidence from Central Europe," ILR Review, Cornell University, ILR School, vol. 65(3), pages 607-629, July.
    • Handle: RePEc:sae:ilrrev:v:65:y:2012:i:3:p:607-629
    DOI: 10.1177/001979391206500306
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    Cited by:

    1. Iga Magda & Ewa Cukrowska-Torzewska, 2019. "Gender wage gap in the workplace: Does the age of the firm matter?," IBS Working Papers 01/2019, Instytut Badan Strukturalnych.
    2. Magda, Iga & Marsden, David & Moriconi, Simone, 2016. "Lower coverage but stronger unions? Institutional changes and union wage premia in Central Europe," Journal of Comparative Economics, Elsevier, vol. 44(3), pages 638-656.
    3. Olga Takács & János Vincze, 2023. "Heterogeneous wage structure effects: a partial European East-West comparison," CERS-IE WORKING PAPERS 2305, Institute of Economics, Centre for Economic and Regional Studies.
    4. Maarten Keune, 2021. "Inequality between capital and labour and among wage-earners: the role of collective bargaining and trade unions," Transfer: European Review of Labour and Research, , vol. 27(1), pages 29-46, February.
    5. Iga Magda & Monika Potoczna, 2014. "Does flexible employment pay? European evidence on the wage perspectives of female workers," IBS Working Papers 3/2014, Instytut Badan Strukturalnych.
    6. Monika Uhlerová, 2020. "The Role Of Trade Unions And Social Dialogue During The Crisis: The Case Of Slovakia," Central European Journal of Labour Law and Personnel Management, Labour Law Association, vol. 3(1).
    7. Pi, Jiancai & Fan, Yanwei, 2021. "Institutional change and wage inequality," International Review of Economics & Finance, Elsevier, vol. 71(C), pages 440-452.
    8. Andrea Garnero & François Rycx & Isabelle Terraz, 2020. "Productivity and Wage Effects of Firm‐Level Collective Agreements: Evidence from Belgian Linked Panel Data," British Journal of Industrial Relations, London School of Economics, vol. 58(4), pages 936-972, December.
    9. Jan Horecký, 2018. "Operation And Action Of A Trade Union (In Terms Of Czech Republic Labour Law)," Central European Journal of Labour Law and Personnel Management, Labour Law Association, vol. 1(1).
    10. Bastien Alvarez & Gianluca Orefice & Farid Toubal, 2022. "Trade Liberalization, Collective Bargaining and Workers: Wages and Working Conditions," Working Papers 2022-02, CEPII research center.
    11. Sang‐Wook (Stanley) Cho & Julián P. Díaz, 2016. "Accounting for Skill Premium Patterns: Evidence from the EU Accession," Southern Economic Journal, John Wiley & Sons, vol. 83(1), pages 271-299, July.
    12. Ivlevs, Artjoms & Veliziotis, Michail, 2015. "What Do Unions Do in Times of Economic Crisis? Evidence from Central and Eastern Europe," IZA Discussion Papers 9466, Institute of Labor Economics (IZA).
    13. Anna Baranowska-Rataj & Iga Magda, 2015. "The impact of the minimum wage on job separations and working hours among young people in Poland," Working Papers 75, Institute of Statistics and Demography, Warsaw School of Economics.
    14. Ulku,Hulya & Muzi,Silvia, 2015. "Labor market regulations and outcomes in Sweden : a comparative analysis of recent trends," Policy Research Working Paper Series 7229, The World Bank.
    15. Sang-Wook (Stanley) Cho & Juliàn P. Dìaz, 2014. "Accounting for Skill Premium Patterns during the EU Accession: Productivity or Trade?," Discussion Papers 2014-14, School of Economics, The University of New South Wales.
    16. Iga Magda, 2017. "Do trade unions in Central and Eastern Europe make a difference?," IZA World of Labor, Institute of Labor Economics (IZA), pages 360-360, May.

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