Collective Bargaining and Wage Dispersion in Europe

Authors

  • Carlo Dell’Aringa,

    1. Istituto di Economia dell’Impresa e del Lavoro, Università Cattolica, Milano, Italy
    Search for more papers by this author
    • Carlo Dell’Aringa is at Istituto di Economia dell’Impresa e del Lavoro, Università Cattolica, Milano, Italy. Laura Pagani is at Dipartimento di Economia Politica, Università di Milano Bicocca, Milano, Italy.

  • Laura Pagani

    1. Dipartimento di Economia Politica, Università di Milano Bicocca, Milano, Italy
    Search for more papers by this author
    • Carlo Dell’Aringa is at Istituto di Economia dell’Impresa e del Lavoro, Università Cattolica, Milano, Italy. Laura Pagani is at Dipartimento di Economia Politica, Università di Milano Bicocca, Milano, Italy.


Abstract

The level at which collective bargaining takes place is usually considered important in determining wage levels and wage inequalities. Two different situations are considered: a first in which bargaining is only ‘multi-employer’, and a second in which it is ‘multi-level’, in the sense that workers can be covered by both a ‘multi-employer’ and a ‘single-employer’ contract at the same time. The purpose of this paper is to analyse the impact of these different institutional settings on pay dispersion. The study is carried out using the European Structure of Earnings Survey, which is a large dataset containing detailed matched employer–employee information for the year 1995. The countries analysed are Italy, Belgium and Spain. The empirical results generally show that wages of workers covered by only a ‘multi-employer’ contract are no more compressed than those of workers covered by both ‘multi-employer’ and ‘single-employer’ contracts. This implies that where workers are not covered by single-employer bargaining, they receive wage supplements paid unilaterally by their employers.

Ancillary