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The Costs and Benefits of Various Wage Bargaining Structures: An Empirical Exploration
Author:
Mr. Alun H. Thomas
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Series:
IMF Working Papers
Volume/Issue:
Volume 2002: Issue 071
Language:
English
Publication Date:
01 Apr 2002
DOI:
https://doi.org/10.5089/9781451849257.001
ISBN:
9781451849257
ISSN:
1018-5941
Pages:
35
Keywords:
WP; labor market; growth rate; dispersion index; market power; Wage bargaining; unemployment; internal factors; coefficient estimate; utility function; standard error; real wage restraint; Wages; Real wages; Wage adjustments; Unemployment rate
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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The literature on the relationship between the unemployment rate and wage bargaining fails to separate the offsetting effects of a reduction in competition associated with centralized bargaining and the increased awareness of unemployment externalities. This paper uses OECD data to distinguish these effects. While wages have become more sensitive to changes in the unemployment rate in countries that have switched to centralized wage-bargaining arrangements, the industry wage is not particularly sensitive to internal factors (relative price and productivity shifts) in economies with centralized/industry-level bargaining arrangements. The latter effect dominates in terms of persistently high unemployment and weaker growth.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund