Collective Bargaining, Wage Setting and Downward Adjustments in the Continental European Labour Market: Evidence from Portugal
Hugo de Almeida Vilares2021, LSE PhD in Economics Thesis
With the Great Recession as enduring scenery, this journey dwells in widening the acumen on Continental European Labour Markets, particularly during sizable downturns. The yacht, the Portuguese case, is one of its representative designs. The course departs with the specific mannerisms of wage setting institutions, where the first leg reasons the dynamics of collective bargaining in distressed periods, and the second focuses on the influence of trade unions in this wage setting protocol. Then, we have a regatta for an empirical structural analysis of the dynamics of the wage setting and its resilience under significant distress. The last straw deals with the interaction between the labour market institutions and firm liquidity; and its influence on the dynamics of wages and unemployment throughout recessionary periods. At the final harbour, we have drawn a consistent sketch of our yacht’s blueprints, and hopefully of those alike. As the zenith of the journey, we have broaden the knowledge about its conduct on rough waters.
On the Sources of the Union Wage Gap
Hugo de Almeida Vilares2013, Nova SBE MSc in Economics Thesis
In this study a comprehensive analysis on the Union Wage gap is performed from the decision of the worker to acquire union membership until its compensation.
It is clear that contractually protected and more firm attached workers are the nerve of unions. To define the Union wage gap a useful combination of a fixed effect model with a Kernel regression offers a nonlinear semiparametric relationship between the firm's union density and the Union Wage Gaps, which if linearized mimics perfectly the OLS.
It is evidenced that union wage gap ceases to grow when the majority of the workers is unionized - an interesting match with the american system of workplace votings. On average, the Portuguese Union Wage Gap is about 18,03% which is greater than the American and British consensus, 15% and 10% respectively.
Decomposing the gap by types of compensation we show the influence of taxation and the strategic interaction at the bargaining table, as unions place special emphasis on private wage supplements allowing firms to partially o§set its increase by lowering compensation related with the working time.
Resorting to the Decomposition of Gelbach (2009) we realize that unions materialize their gap primarily through a change in the firm's compensation policy, and secondarily through the change in the definition of job positions and promotion rules. Finally, it is evidenced that the average unionized worker is less productive.