Scandinavian Working Papers in Economics

Ratio Working Papers,
The Ratio Institute

No 178: The Decentralization of Wage Bargaining: Four Cases

Nils Karlson () and Henrik Lindberg ()
Additional contact information
Nils Karlson: The Ratio Institute, Postal: The Ratio Institute, P.O. Box 3203, SE-103 64 Stockholm, Sweden
Henrik Lindberg: The Ratio Institute, Postal: The Ratio Institute, P.O. Box 3203, SE-103 64 Stockholm, Sweden

Abstract: The paper contributes to the discussion about the possible trends and processes towards decentralization of wage bargaining or wage setting within the OECD-countries since the 1970s. Based on a data set of 16 OECD countries from 1950 to 2000 our results show that in terms of bargaining level the trend is clear towards decentralization since the 1970s, even though there are important exceptions. In terms of confederal involvement the major decrease occurs among the Nordic countries and the Netherlands, whereas many of the other countries have had a status quo more or less. In terms of government involvement, however, the change is the almost non-existent. The overall tendency is still towards less centralisation, even though a number of countries have not changed or have moved in the opposite direction. Sweden, Denmark, UK and the Netherlands experience the largest decreases in decentralization overall. The processes of decentralization of wage bargaining look very differently in each country. It may occur through changes in the collective agreements themselves or through individual wage-setting outside the system of collective agreements. And the decentralization process may occur both in a context of cooperation between the labor-market organizations or in a setting of conflicts.

Keywords: Wage bargaining; wage setting; collective agreements; centralization; decentralization; labour market models; OECD

JEL-codes: J52

31 pages, September 19, 2011

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