2009
DOI: 10.1016/j.labeco.2008.12.004
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Firm heterogeneity and wages in unionised labour markets: Theory and evidence

Abstract: In many countries wages are set in two stages, where industry-level collective bargaining is followed by firmspecific arrangements determining actual paid wages as a mark-up on the industry wage floor. What explains the wage set in each of these stages? In this paper we show that both the industry wage floor and the average wage cushion are systematically associated with the degree of firm heterogeneity in the industry: The former (latter) is negatively (positively) associated with the productivity spread. Fur… Show more

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Cited by 25 publications
(20 citation statements)
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“…This line of research has generally ignored the role of input markets on network formation, though a notable exception is Mauleon et al, as explained above. 3 Importantly, however, our results on the effects of labour market deregulation contrast sharply with those arising in Mauleon et al (2008), where the focus is on the distribution of bargaining power rather than, as here, changes in labour market structure.…”
Section: Introductioncontrasting
confidence: 63%
“…This line of research has generally ignored the role of input markets on network formation, though a notable exception is Mauleon et al, as explained above. 3 Importantly, however, our results on the effects of labour market deregulation contrast sharply with those arising in Mauleon et al (2008), where the focus is on the distribution of bargaining power rather than, as here, changes in labour market structure.…”
Section: Introductioncontrasting
confidence: 63%
“…Along these lines, Bastos et al (2009) consider a two-stage bargaining model where firms pay a mark-up on the sector's negotiated base wage according to their productivity level.…”
Section: Theorymentioning
confidence: 99%
“…According to Bastos et al (2009) the company specific plans which decide the wages plays a major role in the industry wage platform. It is demonstrated that both the company's income platform and the normal compensation paid are explicitly connected with the level of firm heterogeneity in the business.…”
Section: Unionized Labormentioning
confidence: 99%