IDEAS home Printed from https://ideas.repec.org/p/imf/imfwpa/2002-071.html
   My bibliography  Save this paper

The Costs and Benefits of Various Wage Bargaining Structures: An Empirical Exploration

Author

Listed:
  • Mr. Alun H. Thomas

Abstract

The literature on the relationship between the unemployment rate and wage bargaining fails to separate the offsetting effects of a reduction in competition associated with centralized bargaining and the increased awareness of unemployment externalities. This paper uses OECD data to distinguish these effects. While wages have become more sensitive to changes in the unemployment rate in countries that have switched to centralized wage-bargaining arrangements, the industry wage is not particularly sensitive to internal factors (relative price and productivity shifts) in economies with centralized/industry-level bargaining arrangements. The latter effect dominates in terms of persistently high unemployment and weaker growth.

Suggested Citation

  • Mr. Alun H. Thomas, 2002. "The Costs and Benefits of Various Wage Bargaining Structures: An Empirical Exploration," IMF Working Papers 2002/071, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2002/071
    as

    Download full text from publisher

    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=15757
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Nickell, Stephen J & Wadhwani, Sushil, 1990. "Insider Forces and Wage Determination," Economic Journal, Royal Economic Society, vol. 100(401), pages 496-509, June.
    2. Calmfors, Lars, 1993. "Lessons from the macroeconomic experience of Sweden," European Journal of Political Economy, Elsevier, vol. 9(1), pages 25-72, March.
    3. Moene, K.O. & Wallerstein, M. & Hoel, M., 1992. "Bargaining Structure and Economic Performance," Memorandum 1992_010, Oslo University, Department of Economics.
    4. Cukierman, Alex & Lippi, Francesco, 1999. "Central bank independence, centralization of wage bargaining, inflation and unemployment:: Theory and some evidence," European Economic Review, Elsevier, vol. 43(7), pages 1395-1434, June.
    5. Davis, Steven J. & Henrekson, Magnus, 2005. "Wage-setting institutions as industrial policy," Labour Economics, Elsevier, vol. 12(3), pages 345-377, June.
    6. Per-Anders Edin & Bertil Holmlund, 1995. "The Swedish Wage Structure: The Rise and Fall of Solidarity Wage Policy?," NBER Chapters, in: Differences and Changes in Wage Structures, pages 307-344, National Bureau of Economic Research, Inc.
    7. repec:hhs:iuiwop:529 is not listed on IDEAS
    8. Guzzo, Vincenzo & Velasco, Andres, 1999. "The case for a populist Central Banker," European Economic Review, Elsevier, vol. 43(7), pages 1317-1344, June.
    9. Hibbs, Douglas A, Jr & Locking, Hakan, 2000. "Wage Dispersion and Productive Efficiency: Evidence for Sweden," Journal of Labor Economics, University of Chicago Press, vol. 18(4), pages 755-782, October.
    10. Robert J. Flanagan, 1999. "Macroeconomic Performance and Collective Bargaining: An International Perspective," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1150-1175, September.
    11. Blau, Francine D & Kahn, Lawrence M, 1996. "International Differences in Male Wage Inequality: Institutions versus Market Forces," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 791-836, August.
    12. Acemoglu, Daron & Pischke, Jorn-Steffen, 2000. "Certification of training and training outcomes," European Economic Review, Elsevier, vol. 44(4-6), pages 917-927, May.
    13. Stéphanie Guichard & Jean-Pierre Laffargue, 2000. "The Wage Curve: The Lessons of an Estimation Over a Panel of Countries," Working Papers 2000-21, CEPII research center.
    14. Rodseth,A. & Nymoen,R., 1999. "Nordic wage formation and unemployment seven years later," Memorandum 10/1999, Oslo University, Department of Economics.
    15. International Monetary Fund, 1999. "Neglected Heterogeneity and Dynamics in Cross-Country Savings Regressions," IMF Working Papers 1999/128, International Monetary Fund.
    16. Holden, Steinar, 1994. "Wage bargaining and nominal rigidities," European Economic Review, Elsevier, vol. 38(5), pages 1021-1039, May.
    17. Michael Bruno & Jeffrey D. Sachs, 1985. "Economics of Worldwide Stagflation," NBER Books, National Bureau of Economic Research, Inc, number brun85-1.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. International Monetary Fund, 2005. "Finland: Selected Issues," IMF Staff Country Reports 2005/036, International Monetary Fund.
    2. Angel de la Fuente & Doménech, Rafael., 2009. "Series enlazadas de algunos agregados económicos regionales, 1955-2007. Versión 1.1," Economic Reports 03-09, FEDEA.
    3. Bowdler, Christopher & Nunziata, Luca, 2010. "Labor market structures and the sacrifice ratio," Journal of Macroeconomics, Elsevier, vol. 32(3), pages 816-826, September.
    4. Athanasios Vamvakidis, 2009. "Regional Wage Differentiation and Wage Bargaining Systems in the European Union," Financial Theory and Practice, Institute of Public Finance, vol. 33(1), pages 73-87.
    5. Mr. Athanasios Vamvakidis, 2008. "Regional Wage Differentiation and Wage Bargaining Systems in the EU," IMF Working Papers 2008/043, International Monetary Fund.
    6. Luminita VOCHITA & George CIOBANU & Andreea CIOBANU, 2008. "Implications of wage bargaining systems on regional differentiation in the European Union," Annals of University of Craiova - Economic Sciences Series, University of Craiova, Faculty of Economics and Business Administration, vol. 2(36), pages 862-873, may.
    7. Frenkel, Roberto & Ros, Jaime, 2004. "Unemployment, macroeconomic policy and labor market flexibility: Argentina and Mexico in the 1990s," Sede de la CEPAL en Santiago (Estudios e Investigaciones) 31908, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Groth, Charlotta & Johansson, Asa, 2004. "Bargaining structure and nominal wage flexibility," European Economic Review, Elsevier, vol. 48(6), pages 1349-1365, December.
    2. Holden, Steinar, 2005. "Monetary regimes and the co-ordination of wage setting," European Economic Review, Elsevier, vol. 49(4), pages 833-843, May.
    3. Aidt, T.S. & Tzannatos, Z., 2005. "The Cost and Benefits of Collective Bargaining," Cambridge Working Papers in Economics 0541, Faculty of Economics, University of Cambridge.
    4. Alfonso Arpaia & Gilles Mourre, 2012. "Institutions And Performance In European Labour Markets: Taking A Fresh Look At Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 26(1), pages 1-41, February.
    5. Davis, Steven J. & Henrekson, Magnus, 2005. "Wage-setting institutions as industrial policy," Labour Economics, Elsevier, vol. 12(3), pages 345-377, June.
    6. Bernardo Fanfani, 2019. "The Employment Effects of Collective Bargaining," Working papers 064, Department of Economics, Social Studies, Applied Mathematics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino.
    7. Salvador Ortigueira, 2013. "The Rise and Fall of Centralized Wage Bargaining," Scandinavian Journal of Economics, Wiley Blackwell, vol. 115(3), pages 825-855, July.
    8. Kåre Johansen & Ørjan Mydland & Bjarne Strøm, 2007. "Politics in wage setting: does government colour matter?," Economics of Governance, Springer, vol. 8(2), pages 95-109, February.
    9. Nir Klein, 2004. "Collective Bargaining and Its Effect on the Central Bank Conservatism: Theory and Some Evidence," Bank of Israel Working Papers 2004.07, Bank of Israel.
    10. Richard B. Freeman, 2000. "Single Peaked Vs. Diversified Capitalism: The Relation Between Economic Institutions and Outcomes," NBER Working Papers 7556, National Bureau of Economic Research, Inc.
    11. Fanfani, Bernardo, 2023. "The employment effects of collective wage bargaining," Journal of Public Economics, Elsevier, vol. 227(C).
    12. Steinar Holden, 1998. "Wage Drift and the Relevance of Centralised Wage Setting," Scandinavian Journal of Economics, Wiley Blackwell, vol. 100(4), pages 711-731, December.
    13. Henrekson, Magnus & Rosenberg, Nathan, 2000. "Incentives for Academic Entrepreneurship and Economic Performance: Sweden and the United States," SSE/EFI Working Paper Series in Economics and Finance 362, Stockholm School of Economics.
    14. Lars Calmfors, 2001. "Wages and Wage-Bargaining Institutions in the EMU – A Survey of the Issues," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 28(4), pages 325-351, December.
    15. Glassner, Vera & Pusch, Toralf, 2010. "The Emergence of Wage Coordination in the Central Western European Metal Sector and its Relationship to European Economic Policy," IWH Discussion Papers 13/2010, Halle Institute for Economic Research (IWH).
    16. Alain Borghijs & Sjef Ederveen & Ruud de Mooij, 2003. "European wage coordination; nightmare or dream to come true? An economic analysis of wage bargaining institutions in the EU," CPB Discussion Paper 17.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    17. Athanasios Vamvakidis, 2009. "Regional Wage Differentiation and Wage Bargaining Systems in the European Union," Financial Theory and Practice, Institute of Public Finance, vol. 33(1), pages 73-87.
    18. Luminita VOCHITA & George CIOBANU & Andreea CIOBANU, 2008. "Implications of wage bargaining systems on regional differentiation in the European Union," Annals of University of Craiova - Economic Sciences Series, University of Craiova, Faculty of Economics and Business Administration, vol. 2(36), pages 862-873, may.
    19. Henrekson, Magnus & Rosenberg, Nathan, 2001. "Designing Efficient Institutions for Science-Based Entrepreneurship: Lessons from the US and Sweden," The Journal of Technology Transfer, Springer, vol. 26(3), pages 207-231, June.
    20. Mr. Athanasios Vamvakidis, 2008. "Regional Wage Differentiation and Wage Bargaining Systems in the EU," IMF Working Papers 2008/043, International Monetary Fund.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:2002/071. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Akshay Modi (email available below). General contact details of provider: https://edirc.repec.org/data/imfffus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.