Centralized Wage Bargaining and the Celtic Tiger Phenomenon

30 Pages Posted: 18 Jun 2007

See all articles by Lucio Baccaro

Lucio Baccaro

International Institute for Labour Studies

Simoni Simoni

London School of Economics & Political Science (LSE)

Abstract

Drawing on a variety of sources and research methods, this article argues that centralized wage bargaining contributed to the Celtic Tiger phenomenon by linking wage increases in the dynamic multinational companies sector to wage and productivity increases in the much more sluggish domestic sector of the economy and, in so doing, considerably increased the competitiveness of foreign multinational companiesa key driver of Irish growth. The article also argues that much-received wisdom about the institutional and organizational preconditions for centralized wage regulation needs to be reconsidered in light of the Irish case. Public sector unions played a pivotal role in initiating and sustaining wage centralization, yet their leadership role did not undermine its effectiveness. Likewise, internal democratic procedures and the absence of wage compression policies, rather than centralized organizational structures, facilitated compliance with centralized wage policies.

Suggested Citation

Baccaro, Lucio and Simoni, Marco, Centralized Wage Bargaining and the Celtic Tiger Phenomenon. Industrial Relations: A Journal of Economy and Society, Vol. 46, No. 3, pp. 426-455, July 2007, Available at SSRN: https://ssrn.com/abstract=994018 or http://dx.doi.org/10.1111/j.1468-232X.2007.00476.x

Lucio Baccaro (Contact Author)

International Institute for Labour Studies ( email )

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Marco Simoni

London School of Economics & Political Science (LSE)

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