The effects of the decentralization of collective bargaining on wages and wage dispersion: Evidence from the Finnish forest and IT industries

Abstract

Recently, Finnish forest industries shifted from sectoral collective bargaining to firm-level bargaining, and the IT services industry shifted to a hybrid of sector- and firm-level bargaining. Using administrative data on monthly wages and the synthetic difference-in-differences method, I study the causal effects of collective bargaining decentralization on the level and dispersion of wages. Despite the substantial change in the level of collective bargaining, I generally find muted effects on the level and dispersion of wages. I find positive and economically and statistically significant effects on wage levels and within-firm wage dispersion only for blue-collar workers in the paper industry.