Institute for Research on Labor and Employment

The paper examines the role of collective bargaining systems as a determinant of the inter-industry wage structure. It compares wage patterns of six countries: Austria, Canada, Germany, Norway, Sweden and the U.S.. We use comparable wage regressions from micro cross-sections data to calculate inequality in pay across sectors. Our findings suggest the following: First, high (low) wage sectors in one country tend to be high (low) wage sectors in others, irrespective of the (dis)similarity in labor market institutions. Second, differences in the amount of pay inequality are likely to be the result of differences in collective bargaining: more centralized bargaining structures tend to narrow pay differentials across industries.