Rent-Sharing under Different Bargaining Regimes: Evidence from Linked Employer–Employee Data
Article first published online: 26 AUG 2011
© Blackwell Publishing Ltd/London School of Economics 2011
British Journal of Industrial Relations
Volume 51, Issue 1, pages 28–58, March 2013
How to Cite
Rusinek, M. and Rycx, F. (2013), Rent-Sharing under Different Bargaining Regimes: Evidence from Linked Employer–Employee Data. British Journal of Industrial Relations, 51: 28–58. doi: 10.1111/j.1467-8543.2011.00877.x
- Issue published online: 25 FEB 2013
- Article first published online: 26 AUG 2011
- Final version accepted on 16 June 2011.
Using Belgian linked employer–employee data, we examine how collective bargaining arrangements affect the relationship between firms' profitability and individual wages via rent-sharing. In industries where agreements are usually renegotiated at firm-level (‘decentralized industries’) wages and firm-level profits are positively correlated regardless of the type of collective wage agreement by which the workers are covered (industry or firm). On the other hand, where firm-level wage renegotiation is less common (‘centralized industries’), wages are only significantly related to firms' profitability for workers covered by a firm-level collective agreement. Thus, industry-wide contracts that are not complemented by a firm-level collective agreement suppress the impact of firm profits on workers' wages in centralized industries.