Scandinavian Working Papers in Economics
Working Paper Series,
Stockholm University, Swedish Institute for Social Research
No 3/2006: The outcome of individual wage bargaining and the influence of managers' bargaining power: evidence from union data
Lena Granqvist () and Håkan Regnér ()
Additional contact information
Lena Granqvist: Swedish Confederation of Professional Associations (SACO), Postal: Box 2206, SE-103 15 Stockholm, Sweden
Håkan Regnér: Swedish Confederation of Professional Associations (SACO), Postal: Box 2206, SE-103 15 Stockholm, Sweden
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
24 pages, May 8, 2006
Full text files
WP06no3.pdf
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