British Journal of Political Science

Table of Contents - 2002 - Volume 32, Issue 02  


Comparative Political Economy of Wage Distribution: The Role of Partisanship and Labour Market Institutions

JONAS  PONTUSSON  a1 1 , DAVID  RUEDA  a1 1 and CHRISTOPHER R.  WAY  a1 1
a1 Department of Government, Cornell University.

Abstract

Through a pooled cross-section time-series analysis of the determinants of wage inequality in sixteen OECD countries from 1973 to 1995, we explore how political-institutional variables affect the upper and lower halves of the wage distribution. Our regression results indicate that unionization, centralization of wage bargaining and public-sector employment primarily affect the distribution of wages by boosting the relative position of unskilled workers, while the egalitarian effects of Left government operate at the upper end of the wage hierarchy, holding back the wage growth of well-paid workers. Further analysis shows that the differential effects of government partisanship are contingent on wage-bargaining centralization: in decentralized bargaining systems, Left government is associated with compression of both halves of the wage distribution.


Footnotes

1 For helpful comments and suggestions, we thank James Alt, Rob Franzese, Richard Freeman, Larry Kahn, Michael Wallerstein and three anonymous referees.