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The incidence and effects of decentralized wage bargaining in Finland

Author

Listed:
  • Antti Kauhanen

    (ETLA Economic Research
    University of Jyväskylä)

  • Terhi Maczulskij

    (ETLA Economic Research
    IZA Institute of Labor Economics)

  • Krista Riukula

    (ETLA Economic Research)

Abstract

There was a strong push from employers to decentralize wage setting in Finland in the early 2000s. We analyze the incidence of decentralization and its effect on the level and dispersion of wages by using nationally representative panel data. The results show that wage setting was more likely decentralized in collective agreements where a high share of employees worked in manufacturing or real estate industries than in other industries, such as in education and human health and social work activities. Decentralization was, for the most part, quite short-lived. Using recent difference-in-differences methods that allow for heterogeneous treatment effects and differences in the timing of treatment, we show that decentralization had modest positive effects on the level and dispersion of wages in manufacturing.

Suggested Citation

  • Antti Kauhanen & Terhi Maczulskij & Krista Riukula, 2024. "The incidence and effects of decentralized wage bargaining in Finland," Journal of Labor Research, Springer, vol. 45(2), pages 232-253, June.
    • Handle: RePEc:spr:jlabre:v:45:y:2024:i:2:d:10.1007_s12122-024-09356-x
    DOI: 10.1007/s12122-024-09356-x
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    References listed on IDEAS

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    Cited by:

    1. Kauhanen, Antti, 2024. "The Effects of the Decentralization of Collective Bargaining on Wage Differences Among Employee Groups," ETLA Working Papers 118, The Research Institute of the Finnish Economy.

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