New Direct Empirical Evidence on Wage Setting

Introduction

Our project proposes to provide new empirical evidence on wage setting. This evidence will enhance our understanding of industrial relations and wage inequality.

Collective Bargaining Process

First, we will open up the collective bargaining process between incumbent employees and their employers in both France and the US.

Textual Analysis

We will conduct textual analysis of collective bargaining agreements.

High-Frequency Surveys

We will design two-sided high-frequency surveys to:

• Follow the bargaining process within firms (e.g. offer sequences)
• Measure the preferences of workers’ and employers’ representatives over various trade-offs (e.g. wages vs employment)

Quasi-Experimental Designs

Using quasi-experimental designs, we will study:

• How the identity of the workers’ and employers’ representatives matters for agreement outcomes
• Overall bargaining efficiency

Experimental Evidence

We will provide the first experimental evidence in industrial relations study through two randomized control trials.

France

In France, we will evaluate the effects of negotiation training programs on collective bargaining outcomes.

United States

In the US, we will test for union threat effects in non-unionized workplaces through information experiments.

Wage Setting Process for External Hires

Second, we will leverage the extraordinary opportunities offered by online job boards to open up the wage setting process for external hires.

Data Collection

We will complement matched online-search and employment register data with detailed firm and worker high-frequency surveys in both France and Sweden.

Analysis of Bargaining

We will provide a thorough analysis of:

• Selection into individual bargaining
• Determinants of bargaining intensity and offers

Testing Bargaining Theories

We will test for bargaining theories using experimental information shocks.

Empirical Classification of Recruiters

We will propose an empirical classification of recruiters based on their willingness to bargain with external hires that can be used to study strategic interactions among heterogeneous bargaining firms.

Policy Implications

Our empirical evidence will guide policymakers in the design of collective bargaining rules and online job boards.