Abstract
This paper studies how decentralization of wage bargaining from sector to firm level influences wage levels and wage dispersion. We use a detailed panel data set covering a period of decentralization in the Danish labor market. The decentralization process provides exogenous variation in the individual worker's wage-setting system that facilitates identification of the effects of decentralization. Consistent with predictions we find that wages are more dispersed under firm-level bargaining compared to more centralized wage-setting systems. However, the differences across wage-setting systems are reduced substantially when controlling for unobserved individual level heterogeneity.
| Original language | English |
|---|---|
| Publisher | Department of Economics, University of Copenhagen |
| Pages | 25 |
| Publication status | Published - 2009 |
Keywords
- Faculty of Social Sciences
- panel data quantile regression