{
  "title": "The Costs and Benefits of Various Wage Bargaining Structures: An Empirical Exploration",
  "publication": "IMF Working Papers, April 1, 2002",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/the-costs-and-benefits-of-various-wage-bargaining-structures-an-empirical-exploration-15757",
  "canonical": "https://www.imf.org/en/publications/wp/issues/2016/12/30/the-costs-and-benefits-of-various-wage-bargaining-structures-an-empirical-exploration-15757",
  "overlayPath": "/en/publications/wp/issues/2016/12/30/the-costs-and-benefits-of-various-wage-bargaining-structures-an-empirical-exploration-15757/index.md",
  "summary": "The literature on the relationship between the unemployment rate and wage bargaining fails to separate the offsetting effects of a reduction in competition associated with centralized bargaining and the increased awareness of unemployment externalities.",
  "sections": [
    {
      "heading": "Summary and central finding",
      "content": "- The literature on the relationship between the unemployment rate and wage bargaining fails to separate the offsetting effects of a reduction in competition associated with centralized bargaining and the increased awareness of unemployment externalities.\n- This paper uses OECD data to distinguish these effects.\n- While wages have become more sensitive to changes in the unemployment rate in countries that have switched to centralized wage-bargaining arrangements, the industry wage is not particularly sensitive to internal factors (relative price and productivity shifts) in economies with centralized/industry-level bargaining arrangements.\n- The latter effect (weak sensitivity of industry wages to internal factors) dominates in terms of persistently high unemployment and weaker growth."
    },
    {
      "heading": "Data and empirical approach",
      "content": "- Data source: OECD data (as stated in the summary).\n- Empirical focus: distinguishing the effects of (a) reduced competition associated with centralized bargaining and (b) increased awareness of unemployment externalities on the relationship between unemployment and wage bargaining."
    },
    {
      "heading": "Key implications and interpretation",
      "content": "- Centralized wage-bargaining arrangements are associated with greater sensitivity of wages to changes in the unemployment rate.\n- Centralized/industry-level bargaining arrangements are associated with industry wages being relatively unresponsive to internal factors such as relative price and productivity shifts.\n- The limited responsiveness of industry wages to internal factors is identified as the dominant channel leading to persistently high unemployment and weaker growth."
    },
    {
      "heading": "Subjects and keywords",
      "content": "- Subject: Labor, Real wages, Unemployment rate, Wage adjustments, Wage bargaining, Wages\n- Keywords: coefficient estimate, dispersion index, growth rate, internal factors, labor market, market power, real wage restraint, Real wages, standard error, unemployment, Unemployment rate, utility function, Wage adjustments, Wage bargaining, Wages, WP\n\n---\n\n Content in this bundle\n\n- 131893\n  - 131893 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - 131893 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/the-costs-and-benefits-of-various-wage-bargaining-structures-an-empirical-exploration-15757"
    }
  ],
  "bullets": [
    "[Markdown version](/en/publications/wp/issues/2016/12/30/the-costs-and-benefits-of-various-wage-bargaining-structures-an-empirical-exploration-15757/index.md)",
    "[Structured JSON version](/en/publications/wp/issues/2016/12/30/the-costs-and-benefits-of-various-wage-bargaining-structures-an-empirical-exploration-15757/index.json)",
    "[Bundle manifest](/en/publications/wp/issues/2016/12/30/the-costs-and-benefits-of-various-wage-bargaining-structures-an-empirical-exploration-15757/bundle-manifest.json)",
    "Authors: Alun H. Thomas",
    "Published: April 1, 2002",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451849257.001",
    "The literature on the relationship between the unemployment rate and wage bargaining fails to separate the offsetting effects of a reduction in competition associated with centralized bargaining and the increased awareness of unemployment externalities.",
    "This paper uses OECD data to distinguish these effects.",
    "While wages have become more sensitive to changes in the unemployment rate in countries that have switched to centralized wage-bargaining arrangements, the industry wage is not particularly sensitive to internal factors (relative price and productivity shifts) in economies with centralized/industry-level bargaining arrangements.",
    "The latter effect (weak sensitivity of industry wages to internal factors) dominates in terms of persistently high unemployment and weaker growth.",
    "Data source: OECD data (as stated in the summary).",
    "Empirical focus: distinguishing the effects of (a) reduced competition associated with centralized bargaining and (b) increased awareness of unemployment externalities on the relationship between unemployment and wage bargaining.",
    "Centralized wage-bargaining arrangements are associated with greater sensitivity of wages to changes in the unemployment rate.",
    "Centralized/industry-level bargaining arrangements are associated with industry wages being relatively unresponsive to internal factors such as relative price and productivity shifts.",
    "The limited responsiveness of industry wages to internal factors is identified as the dominant channel leading to persistently high unemployment and weaker growth.",
    "Subject: Labor, Real wages, Unemployment rate, Wage adjustments, Wage bargaining, Wages",
    "Keywords: coefficient estimate, dispersion index, growth rate, internal factors, labor market, market power, real wage restraint, Real wages, standard error, unemployment, Unemployment rate, utility function, Wage adjustments, Wage bargaining, Wages, WP",
    "**131893**"
  ],
  "related": [
    {
      "title": "131893",
      "role": "document",
      "sourceUrl": "https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2002/_wp0271.pdf",
      "summary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2002/_wp0271.pdf.md",
        "mime": "text/markdown"
      },
      "binary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2002/_wp0271.pdf",
        "mime": "application/pdf"
      }
    }
  ],
  "alternates": {
    "markdown": "/en/publications/wp/issues/2016/12/30/the-costs-and-benefits-of-various-wage-bargaining-structures-an-empirical-exploration-15757/index.md",
    "json": "/en/publications/wp/issues/2016/12/30/the-costs-and-benefits-of-various-wage-bargaining-structures-an-empirical-exploration-15757/index.json",
    "bundleManifest": "/en/publications/wp/issues/2016/12/30/the-costs-and-benefits-of-various-wage-bargaining-structures-an-empirical-exploration-15757/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-17T07:40:56.587Z"
}