Wage formation among workers in the metal industry in the light of collective agreements

The study examines wage formation and wage differentials among workers in the metal industry in Finland.

Using individual-level wage statistics data, the study analyses how the hourly wage is formed and what gives rise to wage differentials. The central questions concern pay differentials between the sexes and between age cohorts, the actual significance of the collective agreement system in practice, and the extent to which centralised bargaining produces an efficient outcome in accordance with economic theory.

The data cover the final quarter of 1990, at which time the PARAKE wage structure reform had just been introduced in the metal industry. The study provides more detailed individual-level information on wage structure than earlier research, which has focused primarily on sector and worker group averages.

The conclusions also assess the development needs of the collective agreement system and consider whether the bargaining system is a genuine guide to wage formation or merely a formal framework that labour markets bypass in practice. (AI translation)

• ISSN: 0358-5980
• ISBN: 951-9282-66-1