Roope Uusitalo and Juhana Vartiainen

in The Structure of Wages

Published by University of Chicago Press

Published in print February 2009 | ISBN: 9780226470504
Published online February 2013 | e-ISBN: 9780226470511 | DOI:

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This chapter reports an econometric analysis of the wage structure in Finnish manufacturing industries. It attempts to illustrate how the last ten years have meant a gradual increase in the importance of firm-specific factors in pay determination. The Finnish wage bargaining system aims to control the average rate of wage growth while leaving relative wages to decentralized, plant-level, or individual decision making. The average wage of the lowest decile is about 57 to 59 percent of the mean wage in Finland, a couple of percentage points lower than in Sweden. The Finnish wage-setting institutions lead to fairly uniform wage increases. Those who change occupation or employer are exposed to higher variation of earnings growth. Wage setting is becoming a bit more firm specific, while centralized agreements on pay increases continue to be the main force that impacts the growth in average pay.

Keywords: wage structure; Finnish manufacturing industries; econometric analysis; wage bargaining system; Finland; occupation; earnings growth

Chapter.  11291 words.  Illustrated.

Subjects: International Economics

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