Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/180586
Authors: 
Garnero, Andrea
Rycx, Francois
Terraz, Isabelle
Year of Publication: 
2018
Series/Report no.: 
IZA Discussion Papers 11568
Abstract: 
How do firm-level collective agreements affect firm performance in a multi-level bargaining system? Using detailed Belgian linked employer-employee panel data, our findings show that firm agreements increase both wage costs and productivity (with respect to sector-level agreements). Relying on a recent approach developed by Bartolucci (2014), they also indicate that firm agreements exert a stronger impact on wages than on productivity, so that profitability is hampered. However, this rent-sharing effect only holds in manufacturing. In private sector services, the raw wage premium associated to firm agreements is entirely driven by compositional effects. Furthermore, estimates show that firm agreements lead to significantly more rent-sharing among firms operating in less competitive environments. Firm agreements are thus mainly found to raise wages beyond productivity when the rents to be shared between workers and firms are relatively big. Overall, this suggests that firm-level agreements benefit to both employers and employees – through higher productivity and wages – without being very detrimental to firms' performance.
Subjects: 
collective bargaining
productivity
labour costs
linked panel data
JEL: 
C33
J24
J31
Document Type: 
Working Paper
Social Media Mentions:

Files in This Item:
File
Size
301.87 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.