Heterogeneous Impacts of the Decentralization of Collective Bargaining

41 Pages Posted: 16 Nov 2020

See all articles by Antti Kauhanen

Antti Kauhanen

ETLA, Research Institute of the Finnish Economy

Terhi Maczulskij

University of Jyväskylä - School of Business and Economics

Krista Riukula

ETLA, Research Institute of the Finnish Economy

Abstract

This paper analyses the heterogeneous effects of the decentralization of collective bargaining on the incidence of wage increases and wage dispersion in Finland. We use linked employer-employee panel data for the 2005-2013 period, which includes major changes in bargaining systems and economic conditions. Our regression results from models with high-dimensional individual and firm fixed effects show that decentralized bargaining leads to very different outcomes for blue- and white-collar employees. Decentralized bargaining decreases wage dispersion among blue-collar employees and slightly increases it among white-collar employees. Decentralization also affects the incidence of wage increases differently for blue- and white-collar employees. We argue that these differences reflect the different preferences of the employee groups. We also show that the fallback option in local negotiations affects the decentralization outcomes.

Keywords: decentralization, collective agreements, wage bargaining, wage increase, wage dispersion

JEL Classification: J31, J51, J52

Suggested Citation

Kauhanen, Antti and Maczulskij, Terhi and Riukula, Krista, Heterogeneous Impacts of the Decentralization of Collective Bargaining. IZA Discussion Paper No. 13867, Available at SSRN: https://ssrn.com/abstract=3730465

Antti Kauhanen (Contact Author)

ETLA, Research Institute of the Finnish Economy ( email )

Arkadiankatu 21B
Helsinki, 00100
Finland

HOME PAGE: http://staff.etla.fi/kauhanen/

Terhi Maczulskij

University of Jyväskylä - School of Business and Economics ( email )

University of Jyväskylä
PO Box 35
FIN 40351, FIN-40014
Finland

Krista Riukula

ETLA, Research Institute of the Finnish Economy

Lonnrotink. 4 B
FIN-00120 Helsinki, 00120
United States

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