Who wants wage moderation? Trade exposure, export-led growth, and the irrelevance of bargaining structure

Abstract

An extensive literature in comparative political economy has examined the determinants of wage militancy and moderation at the country level. So far, however, there has been no attempt to analyse the determinants of wage satisfaction and dissatisfaction at the individual level. Based on two waves of the International Social Survey Programme, this article seeks to fill this void. It examines to what extent trade exposure affects individual attitudes towards wages, and whether bargaining institutions facilitate the internalisation of competitiveness requirements, as suggested by the vast literature on neocorporatism. Surprisingly, no relationship is found between the structure of wage bargaining (more or less coordinated or centralised) and wage dissatisfaction at the individual level. Instead, wage dissatisfaction decreases strongly when workers are individually exposed to trade and countries rely heavily on export-led growth. The findings point to the need to rethink the determinants of wage moderation.