(Press-News.org) Research from the University of Copenhagen has revealed the effects of a decade of decentralised wage negotiations in the private sector. In an article in the Journal of Labor Economics, researchers conclude that wages have risen for all employees and that companies are now better able to retain key personnel.
"Average wages rise when employees and managers negotiate on an individual basis, without a collective-bargaining agreement dictating fixed rates for all," explains Jakob Roland Munch, professor of economics at the University of Copenhagen.
For the first time, this trend has been followed over a ten-year period – and results indicate that the effect on wages has been positive. The research shows that the average increase for Danes employed in the private sector and subject to decentralised wage bargaining is 5% higher than for employees whose wages are calculated on the basis of parameters such as seniority.
"The examples we have unearthed in the private sector show clearly that the average wage rises under decentralised bargaining," says Professor Munch. "We didn't expect such a large difference. Even those at the bottom of the hierarchy win under a flexible system. Many other countries in Europe organise wage negotiations in a similar manner, so they may be interested in and inspired by our results." The other two researchers involved in the project are Professor Christian Møller Dahl of the University of Southern Denmark, and Assistant Professor Daniel le Maire, also from the University of Copenhagen.
Flexible wage systems reward abilities
Among those who benefit the most are those with a long-term higher education and long-term work experience. For this group, wages have risen by 7%, while those with shorter education and little work experience have seen their wages rise by 3%.
A flexible wage system affords better opportunities to reward employees according to their abilities, which means that companies can adapt more easily to market demand.
"Globalisation and technological progress affect companies differently and create a need for restructuring. For example, flexible wage systems make it easier for companies facing growing demand to retain key employees, while employees under threat of outsourcing can end up keeping their jobs at a lower wage," Munch continues.
"One fairly obvious interpretation of the positive effect revealed by our study is that a decentralised system means companies are better placed to cope with changes to market conditions and are therefore more productive.
Our research concerns the private sector, but the principles are transferrable to other sectors," he stresses.
"Our research sends a signal that decentralisation actually makes it possible to identify areas in which more flexible wage bargaining makes units function more efficiently. It is easy to envisage the same effects in parts of the public sector, where wage bargaining is currently relatively centralised," the professor concludes.
###
Read the article here: http://www.press.uchicago.edu/ucp/journals/journal/jole.html
About the research:
The researchers studied wage bargaining in the private sector in Denmark from 1992 to 2001, using data from Statistics Denmark. The data is from 36 areas covered by collective-bargaining agreements.
Contact
Professor of Economics at the University of Copenhagen
Jakob Roland Munch
Email: Jakob.Roland.Munch@econ.ku.dk
Tel.: +45 35 32 30 19
Mobile: +45 23 28 22 42
Both employees and companies benefit from flexible wage systems
2013-08-03
ELSE PRESS RELEASES FROM THIS DATE:
Sounding rocket to study active regions on the sun
2013-08-02
At NASA's White Sands Test Facility in Las Cruces, N.M., a sounding rocket is being readied for flight. Due to launch on Aug. 8, 2013, the VERIS rocket, short for Very high Resolution Imaging Spectrometer, will launch for a 15-minute trip carrying an instrument that can measure properties of the structures in the sun's upper atmosphere down to 145 miles across, some eight times clearer than any similar telescope currently in space.
When it comes to observing the sun, different instruments and techniques must be used to study different temperatures of material or different ...
NASA seeing which way the wind blows
2013-08-02
Most aircraft carrying Doppler radar look like they've grown a tail, developed a dorsal fin, or sprouted a giant pancake on their backs. But when the unmanned Global Hawk carries a radar system this summer, its cargo will be hard to see. The autonomous and compact High-altitude Imaging Wind and Rain Profiler, or HIWRAP, a dual-frequency conical-scanning Doppler radar, will hang under the aircraft's belly as it flies above hurricanes to measure wind and rain and to test a new method for retrieving wind data.
HIWRAP is one of the instruments that will fly in this summer's ...
NASA sees Hurricane Gil being chased by developing storm
2013-08-02
On July 31, NASA's TRMM satellite saw Tropical Storm Gil intensifying and the storm became a hurricane. NASA's Aqua satellite and NOAA's GOES-15 satellite captured views of Gil on Aug. 1 as it was being chased by another developing tropical system.
The Atmospheric Infrared Sounder or AIRS instrument aboard NASA's Aqua satellite captured an infrared image of Hurricane Gil on August 1 at 10:11 UTC or 6:11 a.m. EDT. Strongest storms and heaviest rains appear around the center where cloud top temperatures exceed -63F/-52.
Microwave imagery on Aug. 1 from NASA's Aqua satellite ...
NASA looks at Tropical Storm Jebi in South China Sea
2013-08-02
Tropical Storm Jebi developed on July 31 and NASA satellite data on Aug. 1 shows the storm filling up at least half of the South China Sea.
The Atmospheric Infrared Sounder or AIRS instrument aboard NASA's Aqua satellite captured an infrared image of Tropical Storm Jebi on August 1 at 6:11 UTC or 2:11 a.m. EDT when it passed overhead from space. Strongest storms and heaviest rains appeared south of the center and in a large band of thunderstorms wrapping into the center from the southwest. Additionally, fragmented bands of thunderstorms are also east of the center of ...
Novel 3-D simulation technology helps surgical residents train more effectively
2013-08-02
Chicago, IL (August 1, 2013): A novel interactive 3-dimensional(3-D) simulation platform offers surgical residents a unique opportunity to hone their diagnostic and patient management skills, and then have those skills accurately evaluated according to a new study appearing in the August issue of the Journal of the American College of Surgeons. The findings may help establish a new tool for assessing and training surgical residents.
Previous research studies have shown that the management of patient complications following operations is an extremely important skill ...
ASTRO applauds new GAO report on physician self-referral abuse
2013-08-02
ASTRO Chairman Michael L. Steinberg, MD, FASTRO, called attention to the Government Accountability Office's (GAO) striking report released today, "Medicare: Higher Use of Costly Prostate Cancer Treatment by Providers Who Self-Refer Warrants Scrutiny," that details clear mistreatment of patients who trusted their physicians to care for their prostate cancer. Dr. Steinberg and radiation oncologists nationwide called on Congress to pass the "Promoting Integrity in Medicare Act of 2013" (PIMA), introduced earlier today by Rep. Jackie Speier (D-Calif.) and Rep. Jim McDermott ...
Climate science boost with tropical aerosols profile
2013-08-02
The seasonal influence of aerosols on Australia's tropical climate can now be included in climate models following completion of the first long-term study of fine smoke particles generated by burning of the savanna open woodland and grassland.
Australia's biomass burning emissions comprise about eight per cent of the global total, ranking third by continent behind Africa (48 per cent) and South America (27 per cent).
Lead researcher, CSIRO's Dr Ross Mitchell, said fine particles generated by burning of the tropical savanna of Northern Australia are a globally significant ...
How 'junk DNA' can control cell development
2013-08-02
Researchers from the Gene and Stem Cell Therapy Program at Sydney's Centenary Institute have confirmed that, far from being "junk", the 97 per cent of human DNA that does not encode instructions for making proteins can play a significant role in controlling cell development.
And in doing so, the researchers have unravelled a previously unknown mechanism for regulating the activity of genes, increasing our understanding of the way cells develop and opening the way to new possibilities for therapy.
Using the latest gene sequencing techniques and sophisticated computer ...
Revised location of 1906 rupture of San Andreas Fault in Portola Valley
2013-08-02
SAN FRANCISCO -- New evidence suggests the 1906 earthquake ruptured the San Andreas Fault in a single trace through Portola Village, current day Town of Portola Valley, and indicates a revised location for the fault trace.
Portola Valley, south of San Francisco, has been extensively studied and the subject of the first geological map published in California. Yet studies have offered conflicting conclusions, caused in part by a misprinted photograph and unpublished data, as to the location and nature of the 1906 surface rupture through the area.
"It is critical for ...
New drugs to find the right target to fight Alzheimer's disease
2013-08-02
The future is looking good for drugs designed to combat Alzheimer's disease. EPFL scientists have unveiled how two classes of drug compounds currently in clinical trials work to fight the disease. Their research suggests that these compounds target the disease-causing peptides with high precision and with minimal side-effects. At the same time, the scientists offer a molecular explanation for early-onset hereditary forms of Alzheimer's, which can strike as early as thirty years of age. The conclusions of their research, which has been published in the journal Nature Communications, ...