Decentralized Wage Formation in Sweden

Abstract

Recent Swedish collective bargaining agreements have incorporated provisions for local pay review talks and opportunities for individuals to negotiate their own wages. Using trade union data, we show that members who participate in local pay review talks and members who negotiate their own wages have significantly higher monthly wages than those who do not. Pay decentralization either improves an individual's bargaining position or attracts more productive trade union members. Either way, trade union wage policies to increase individual-level wage variance are achieving their intended effects. Copyright (c) Blackwell Publishing Ltd/London School of Economics 2008.

Productivity and Wage Effects of Firm‐Level Collective Agreements: Evidence from Belgian Linked Panel Data

“…Their results, based on Italian data, show that firm-level bargaining leads to a significant wage gain for both white-and blue-collar workers. Since then, the existence of a positive wage premium associated with firm-level collective agreements has been confirmed for other countries (OECD 2018), including Belgium (Rycx 2003), Denmark (Plasman et al 2007), France (Leclair and Petit 2004), Greece (Daouli et al 2013), Ireland (McGuinness et al 2010, Portugal (Cardoso and Portugal 2005), Spain (Card and de la Rica 2006;Dell'Aringa and Pagani 2007) and Sweden (Granqvist and Regner 2008). The wage premium associated with firm-level collective agreements (with respect to higher-level agreements) is generally estimated at between 3 and 7 per cent.…”

Rethinking Institutions and Institutional Change in European Industrial Relations

“…A focus upon the bargaining institutions themselves misses the manner in which these institutions have come to function as mechanisms for permitting local variation. These agreements permitted not only decentralization to the firm level, but also individualization within a given workforce as collective components declined as a proportion of the wage pool (Granqvist and Regnér 2008). Central agreements under the new industrial relations regime tend to have many fewer minimum wage categories, or none at all, some guarantee of a wage increase, usually as a fallback provision in the event that local agreement cannot be reached, and a local wage pool accompanied by a set of general principles for its distribution (such as that increases be directed towards low paid workers or women).…”

“…Central agreements under the new industrial relations regime tend to have many fewer minimum wage categories, or none at all, some guarantee of a wage increase, usually as a fallback provision in the event that local agreement cannot be reached, and a local wage pool accompanied by a set of general principles for its distribution (such as that increases be directed towards low paid workers or women). The public sector has the most extreme form of these agreements, with few or no minimum wages or guarantees, and the entire wage pool determined and distributed through local bargaining (Granqvist and Regnér 2008).…”

Productivity and wage effects of firm-level collective agreements

“…Their results, based on Italian data, show that firm-level bargaining leads to a significant wage gain for both white-and blue-collar workers. Since then, the existence of a positive wage premium associated with firm-level collective agreements has been confirmed for other countries (OECD, 2018), including Belgium (Rycx, 2003), Denmark (Plasman et al, 2007), France (Leclair et Petit, 2004), Greece (Daouli et al, 2013), Ireland (McGuinness et al, 2010, Portugal (Cardoso and Portugal, 2005), Spain (Card and de la Rica, 2006;Dell'Aringa and Pagani, 2007) and Sweden (Granqvist and Regner, 2008). The wage premium associated with firm-level collective agreements (with respect to higher-level agreements) is generally estimated at between 3 and 7%.…”