Wage Dispersion and Decentralization of Wage Bargaining

40 Pages Posted: 3 Sep 2009

See all articles by Christian M. Dahl

Christian M. Dahl

Department of Business and Economics

Daniel le Maire

University of Copenhagen

Jakob Roland Munch

University of Copenhagen - Department of Economics; Center for Economic and Business Research (CEBR)

Multiple version iconThere are 2 versions of this paper

Date Written: September 2, 2009

Abstract

This paper studies how decentralization of wage bargaining from sector to firm level influences wage levels and wage dispersion. We use a detailed panel data set covering a period of decentralization in the Danish labor market. The decentralization process provides exogenous variation in the individual worker's wage-setting system that facilitates identification of the effects of decentralization. Consistent with predictions we find that wages are more dispersed under firm-level bargaining compared to more centralized wage-setting systems. However, the differences across wage-setting systems are reduced substantially when controlling for unobserved individual level heterogeneity.

Keywords: wage bargaining, decentralization, panel data quantile regression

JEL Classification: J31, J51, C23

Suggested Citation

Dahl, Christian M. and le Maire, Daniel and Munch, Jakob Roland, Wage Dispersion and Decentralization of Wage Bargaining (September 2, 2009). Univ. of Copenhagen Dept. of Economics Discussion Paper No. 09-15. Available at SSRN: https://ssrn.com/abstract=1466767 or http://dx.doi.org/10.2139/ssrn.1466767

Christian M. Dahl (Contact Author)

Department of Business and Economics ( email )

Campusvej 55
DK-5230 Odense M
Denmark
29125486 (Phone)

Daniel Le Maire

University of Copenhagen ( email )

Jakob Roland Munch

University of Copenhagen - Department of Economics ( email )

Ă˜ster Farimagsgade 5
Bygning 26
1353 Copenhagen K.
Denmark
+45 35323019 (Phone)
+45 35323000 (Fax)

HOME PAGE: http://www.econ.ku.dk/Faculty_And_Staff/showID.asp?profile_id=1260

Center for Economic and Business Research (CEBR)

Porcelaenshaven, Bldg 65
DK-2000 Frederiksberg
Denmark

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