Liukumat suomalaisen palkanmuodostuksen joustotekijänä

Abstract

Using micro-level data, we study wage dynamics for the Finnish private sector. In particular, we look at the role of drifts, i.e., the wage adjustments on top of centrally negotiated raises, in the response of aggregate wages to different business cycle conditions, as well as to geographical and professional-level heterogeneity. Our measure of wage inflation is based on workers who stay in the same plant and profession across two periods. We argue that using this approach, which relies on the use of micro-level data, allows us to measure drifts in a more consistent way compared to the official statistics, since we control for worker and job restructuring. Our main finding is that wage drifts have played a key role in aggregate wage dynamics and have provided a substantial degree of flexibility in wage formation. We also look at workers who switch their workplace or occupation across two periods, and find similar dynamics, even though we observe that the switcher wage response to economic conditions is even stronger. Our results indicate that the substantial decline in unemployment and the improvement of the employment rate observed during recent years are not likely to result in strong wage inflation, compared to the conclusions we would make based on traditional aggregate data.

• ISSN: 1795-1801 (Online)
• ISBN: 978-952-209-195-6 (Online)
• JEL: E01, E24, J3
• Publication in PDF-format