The de-collectivisation of pay setting in Britain 1990-98: incidence, determinants and impact

Abstract

What were the causes and consequences of declining collective bargaining coverage in Britain? The demise of collective bargaining did not lead to a greater use of individualised payment mechanisms, 'high-involvement' practices or productivity gains. Wage inequality rose as a result of the decline. However, workplaces that abandoned bargaining created more jobs. Overall, these results raise questions about Britain's labour market performance during the 1990s because they suggest that falling unemployment as a result of weaker trade unions came at the price of slower productivity growth and widening male wage inequality.