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Empirica

, Volume 19, Issue 2, pp 181–201 | Cite as

Labour market institutions and the industry wage distribution

Evidence from Austria, Norway and the U. S.
  • Erling Barth
  • Josef Zweimüller
Article

Abstract

The paper studies the industry wage structures of Austria, Norway, the union sector of the U. S. as well as the non-union sector of the U. S. We make comparable regressions for each country, and are thus able to compare the sectoral earnings patterns controlling for the usual individual characteristics. Our results confirm the hypothesis that the pattern of the inter-industry pay structure is largely independent of labour market institutions: High paying industries in a non-union environment tend to pay high wages also in regimes where bargaining is very centralised and coordinated.

This, however, does not mean that collective bargaining does not matter. The influence is mainly on the amount of wage dispersion: We find considerably lower industry pay gaps in centralised Austria and Norway than in decentralised U. S. Within the U. S., pay differentials within the union sector slightly exceed those of the non-union sector.

The results give support to non-competitive explanations of the labour market. If efficiency wage mechanisms are the reason for wage differentials we expect central bargainers to internalise these effects. Competitive explanations, on the other hand, would predict no difference between the non-union outcome and a central agreement aiming at achieving full employment.

Keywords

Collective Bargaining Wage Distribution Union Sector Labour Market Institution Efficiency Wage 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Gustav Fischer 1992

Authors and Affiliations

  • Erling Barth
    • 1
  • Josef Zweimüller
    • 2
  1. 1.Institute for Social ResearchOsloNorway
  2. 2.Johannes-Kepler-Universität LinzLinzAustria

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