The Costs and Benefits of Various Wage Bargaining Structures: An Empirical Exploration

Author/Editor:

Alun H. Thomas

Publication Date:

April 1, 2002

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

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.

Series:

Working Paper No. 2002/071

Subject:

English

Publication Date:

April 1, 2002

ISBN/ISSN:

9781451849257/1018-5941

Stock No:

WPIEA0712002

Pages:

35

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