The growth of wage dispersion in the Finnish enterprise sector

The article examines the development of wage differentials in the Finnish enterprise sector during the 2000s.

Wage differentials have grown throughout the millennium, particularly at the top of the distribution. Negotiated increases moderated strongly in 2008–2017, which improved cost competitiveness. There is an inverse relationship between negotiated increases and wage drift: low negotiated increases lead to larger wage drift.

The growth in wage differentials is not explained by a single factor. According to Fornaro’s (2024) analysis, the majority of wage differentials arise within companies, but the most significant growth in dispersion has come from wage differentials between companies — both between and within sectors. During the pandemic, wage dispersion within companies also grew. (AI translation)

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