Wage Dispersion and Decentralization of Wage Bargaining

40 Pages Posted: 11 Dec 2011  

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

Abstract

This paper studies how decentralization of wage bargaining from sector to firm-level influences wage levels and wage dispersion. We use detailed panel data covering a period of decentralization in the Danish labor market. The decentralization process provides variation in the individual worker's wage-setting system that facilitates identification of the effects of decentralization. We find a wage premium associated with firm-level bargaining relative to sector-level bargaining, and that the return to skills is higher under the more decentralized wage-setting systems. Using quantile regression, we also find that wages are more dispersed under firm-level bargaining compared to more centralized wage-setting systems.

Keywords: wage bargaining, decentralization, wage dispersion

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. IZA Discussion Paper No. 6176. Available at SSRN: https://ssrn.com/abstract=1970771

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

Paper statistics

Downloads
51
Rank
248,289
Abstract Views
320