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Unemployment, wages and collective bargaining in the European Union

Arbeitslosigkeit, Löhne und Kollektivverhandlungen in der Europäischen Union
[working paper]

Hein, Eckhard; Schulten, Thorsten

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Further Details
Corporate Editor Wirtschafts- und Sozialwissenschaftliches Institut in der Hans-Böckler-Stiftung
Abstract "The paper questions the predominant view on unemployment and wages in the European Union according to which high unemployment is primarily caused by labour market rigidities, i.e. social institutions and regulations which prevent 'market-clearing' real wage levels and structures. It is shown that the foundations of that view coming either from neo-classical or new-Keynesian theory are not convincing, neither theoretically nor empirically. Analysing the developments in the EU during the last four decades, no strictly inverse relationship between real wage growth and unemployment can be found. On the contrary, persistently high unemployment has had strong adverse effects on nominal wage growth and on the labour income share. Weakened labour union bargaining power and changing collective bargaining strategies have contributed to this result. It is therefore concluded that the current EU economic and employment policies aiming at further wage restraint, wage differentiation and decentralisation of collective bargaining are deeply misguided and have to be replaced by an alternative wage policy in Europe as part of a growth and employment oriented coordination of macroeconomic policies." (author's abstract)
Keywords income; development; collective bargaining; impact; labor relations; trade union; unemployment; quota; effect on employment; real wages; wage; employment trend; wage policy; employment policy; EU
Classification Labor Market Research; Labor Market Policy; Income Policy, Property Policy, Wage Policy; Economic Policy; European Politics
Method empirical; quantitative empirical
Document language English
Publication Year 2004
City Düsseldorf
Page/Pages 29 p.
Series WSI-Diskussionspapier, 128
Licence Deposit Licence - No Redistribution, No Modifications
data provider This metadata entry was indexed by the Special Subject Collection Social Sciences, USB Cologne