Dark Half: Decentralized Bargaining and Well-Being at Work

43 Pages Posted: 21 Aug 2021 Last revised: 19 May 2022

See all articles by Terhi Maczulskij

Terhi Maczulskij

University of Jyväskylä - School of Business and Economics

Mika Haapanen

University of Jyväskylä - School of Business and Economics

Antti Kauhanen

ETLA, Research Institute of the Finnish Economy

Krista Riukula

ETLA, Research Institute of the Finnish Economy

Abstract

Using information on collective agreements and administrative data on mental ill-health, sickness absence, and job separations, we study the effect of decentralization on well-being at work in Finland. Our regression results with individual-and firm-level fixed effects show that decentralized wage bargaining leads to distinct outcomes for different employee groups. For example, white-collar employees in white-collar intensive firms show increased well-being at work. In contrast, all employees in blue-collar intensive firms show quite strong and negative responses to decentralization. Decentralization affects mostly job-separation behavior and mental ill-health, whereas no consistent effects for sickness absence are observed. Whether the mechanisms between decentralization and worker's well-being is explained by pay dispersion, wage level, or different preferences toward wage policy needs to be explored further.

Keywords: decentralization, collective agreements, mental health disorder, sickness absence, job separation, blue-collar, white-collar

JEL Classification: J31, J51, J52

Suggested Citation

Maczulskij, Terhi and Haapanen, Mika and Kauhanen, Antti and Riukula, Krista, Dark Half: Decentralized Bargaining and Well-Being at Work. IZA Discussion Paper No. 14654, Available at SSRN: https://ssrn.com/abstract=3908869

Terhi Maczulskij (Contact Author)

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

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

Mika Haapanen

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

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

Antti Kauhanen

ETLA, Research Institute of the Finnish Economy ( email )

Arkadiankatu 21B
Helsinki, 00100
Finland

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

Krista Riukula

ETLA, Research Institute of the Finnish Economy

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

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