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Dark Half: Decentralized Bargaining and Well-Being at Work

Author

Listed:
  • Maczulskij, Terhi

    (ETLA - The Research Institute of the Finnish Economy)

  • Haapanen, Mika

    (University of Jyväskylä)

  • Kauhanen, Antti

    (ETLA - The Research Institute of the Finnish Economy)

  • Riukula, Krista

    (ETLA - The Research Institute of the Finnish Economy)

Abstract
Using information on collective agreements and administrative data on mental ill-health, sickness absence, and job separations, we study the effect of decentralization on well-being at work in Finland. Our regression results with individual-and firm-level fixed effects show that decentralized wage bargaining leads to distinct outcomes for different employee groups. For example, white-collar employees in white-collar intensive firms show increased well-being at work. In contrast, all employees in blue-collar intensive firms show quite strong and negative responses to decentralization. Decentralization affects mostly job-separation behavior and mental ill-health, whereas no consistent effects for sickness absence are observed. Whether the mechanisms between decentralization and worker's well-being is explained by pay dispersion, wage level, or different preferences toward wage policy needs to be explored further.

Suggested Citation

  • Maczulskij, Terhi & Haapanen, Mika & Kauhanen, Antti & Riukula, Krista, 2021. "Dark Half: Decentralized Bargaining and Well-Being at Work," IZA Discussion Papers 14654, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp14654
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    More about this item

    Keywords

    decentralization; collective agreements; mental health disorder; sickness absence; job separation; blue-collar; white-collar;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation

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