Working Paper Series, Swedish Institute for Social Research, Stockholm University
No 3/2006:
The outcome of individual wage bargaining and the influence of managers' bargaining power: evidence from union data
Lena Granqvist ()
and Hĺkan Regnér ()
Abstract: We analyze unique data that identify whether individuals
have participated in decentralized wage setting and whether they have
negotiated their own wages. Wages are significantly higher for those who
have been part of a formalized wage-setting process compared with
non-participants, but only in the public sector. Employees who negotiate
their own wages have higher wages than non-negotiators. Wages are also
significantly higher for those who negotiate with a manager who has the
power to set wages, compared with those who negotiate with a manager who
has no power over wages. This concerns employees in the public and the
private sectors. Quantile regression results reveal that the outcome of
individual bargaining increases over the wage distribution. Percentile wage
differences are significant only among workers who negotiate with a manager
who has the power to set wages. Estimated wage differences between
negotiators and non-negotiators are 4.6% on average, 5.6% in the 90th
percentile, and 2.3% at the 10th percentile.
Keywords: wage bargaining; earnings equations; decentralized wage setting; quantile regression; (follow links to similar papers)
JEL-Codes: J31; J33; J41; J44; (follow links to similar papers)
24 pages, May 8, 2006
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