A1 Journal article (refereed)
The incidence and effects of decentralized wage bargaining in Finland (2024)

Kauhanen, A., Maczulskij, T., & Riukula, K. (2024). The incidence and effects of decentralized wage bargaining in Finland. Journal of Labor Research, Early online. https://doi.org/10.1007/s12122-024-09356-x

JYU authors or editors

Publication details

All authors or editors: Kauhanen, Antti; Maczulskij, Terhi; Riukula, Krista

Journal or series: Journal of Labor Research

ISSN: 0195-3613

eISSN: 1936-4768

Publication year: 2024

Publication date: 05/04/2024

Volume: Early online

Publisher: Springer

Publication country: United States

Publication language: English

DOI: https://doi.org/10.1007/s12122-024-09356-x

Publication open access: Openly available

Publication channel open access: Partially open access channel

Publication is parallel published (JYX): https://jyx.jyu.fi/handle/123456789/94384

Abstract

There was a strong push from employers to decentralize wage setting in Finland in the early 2000s. We analyze the incidence of decentralization and its effect on the level and dispersion of wages by using nationally representative panel data. The results show that wage setting was more likely decentralized in collective agreements where a high share of employees worked in manufacturing or real estate industries than in other industries, such as in education and human health and social work activities. Decentralization was, for the most part, quite short-lived. Using recent difference-in-differences methods that allow for heterogeneous treatment effects and differences in the timing of treatment, we show that decentralization had modest positive effects on the level and dispersion of wages in manufacturing.

Keywords: wages; decentralisation; pay systems; wage formation; pay policy

Free keywords: collective bargaining; decentralization; wage dispersion; difference-in-differences

Contributing organizations

Ministry reporting: Yes

Preliminary JUFO rating: 1