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The Structure of WagesAn International Comparison$
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Edward P. Lazear and Kathryn L. Shaw

Print publication date: 2009

Print ISBN-13: 9780226470504

Published to Chicago Scholarship Online: February 2013

DOI: 10.7208/chicago/9780226470511.001.0001

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PRINTED FROM CHICAGO SCHOLARSHIP ONLINE (www.chicago.universitypressscholarship.com). (c) Copyright University of Chicago Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in CHSO for personal use.date: 21 September 2021

Finland

Finland

Firm Factors in Wages and Wage Changes

Chapter:
(p.149) 5 Finland
Source:
The Structure of Wages
Author(s):

Roope Uusitalo

Juhana Vartiainen

Publisher:
University of Chicago Press
DOI:10.7208/chicago/9780226470511.003.0006

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

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