Work

Wage Dispersion and Decentralization of Wage Bargaining

Year: 2013

Type: article

Abstract: This article 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.

Source: Journal of Labor Economics

DOI: 10.1086/669339

Authors: Christian M. Dahl, Daniel le Maire, Jakob R. Munch

Institutions: University of Southern Denmark, IZA - Institute of Labor Economics, University of Copenhagen

Language: English

Topic: Labor market dynamics and wage inequality

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Decent work and economic growth, Reduced inequalities

Open Access status: green

Funders: Samfund og Erhverv, Det Frie Forskningsråd, National Research Foundation, Danmarks Grundforskningsfond