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The National–Transnational Wage‐Setting Nexus in Europe: What have We Learned from the Early Years of Monetary Integration?
Author(s) -
Ramskogler Paul
Publication year - 2013
Publication title -
jcms: journal of common market studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.54
H-Index - 90
eISSN - 1468-5965
pISSN - 0021-9886
DOI - 10.1111/jcms.12033
Subject(s) - wage , nexus (standard) , economics , wage bargaining , labour economics , efficiency wage , interdependence , competition (biology) , collective bargaining , wage share , differential (mechanical device) , wage growth , public sector , economy , political science , ecology , engineering , aerospace engineering , computer science , law , biology , embedded system
Wage growth has become increasingly interdependent in the European monetary and economic union but a stubborn differential in wage growth rates of some European countries persists. Can peculiarities of national wage‐bargaining systems explain this situation? The article develops the idea that wage growth differentials across Europe are due to differences in wage‐bargaining systems. It is demonstrated that wage growth in the exposed industry is restrained by competition. Spillovers from the exposed sector of the economy to the public sector thus can induce overall wage restraint. However, it is shown that spillovers from the exposed to the public sector differ according to the wage‐bargaining system. Pattern‐setting regimes lead to substantial spillovers and thus induce higher wage restraint than other wage‐bargaining systems.

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