Discussion Paper Details

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Title: Wage Bargaining Structure, Employment and Economic Integration

Author(s): Jean-Pierre Danthine and Jennifer Hunt

Publication Date: July 1992

Keyword(s): Corporatism, Economic Integration, Employment and Wage Bargaining

Programme Area(s): Human Resources and International Macroeconomics

Abstract: It is widely believed that the integration of European economies will have little impact on labour mobility. This does not mean, however, that European labour markets will be unaffected by the process of economic integration. In this paper we show that with increased competition from closer economic integration, the hump-shaped pattern summarizing the relationship between economic performance and the degree of centralization in wage bargaining (Calmfors and Driffill, 1988) flattens out. As a consequence, the importance of the position of a particular economy on the wage-bargaining scale diminishes. We find, however, that the post-integration wage-price structure is closer to the configuration familiar to decentralized economies. It can be inferred that the adjustment to the new environment could be more difficult for economies characterized by centralized wage bargaining.

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Bibliographic Reference

Danthine, J and Hunt, J. 1992. 'Wage Bargaining Structure, Employment and Economic Integration'. London, Centre for Economic Policy Research.