Exploring wage gaps between earned wages and bargained pay rates: the Dutch Case

Abstract

This exploratory study investigates the relationship between earned wages and bargained wages across various Dutch sectors, focusing on the gaps between earned wages and minimum and maximum bargained wages per occupation. The research examines sociodemographic factors associated with these gaps in selected sectors, revealing significant patterns and influential variables. The study finds a consistent gender gap across sectors, with male workers generally benefiting from larger gaps, particularly at higher education levels. Education levels generally correlate positively with the wage gap, although variations exist among sectors. Age plays a significant role, with the gap generally increasing with age and peaking in the 50s. Firm size impacts the wage gap differently across sectors, with smaller firms typically associated with smaller gaps. Firm location influences the gap, with West and South regions of the Netherlands associated with higher earned-minimum bargained wage gaps, particularly in manufacturing.

The study employed two novel experimental steps: calculating minimum and maximum bargained wage references per occupation per sector and determining gaps between earned wages and these references. Data limitations included restricted pay scale information in some collective bargaining agreements and the use of 2-digit ISCO08 occupation codes in the microdata, leading to more aggregated wage reference ranges.

This research advances the empirical exploration of earned-bargained wage gaps and provides a foundation for future studies as more detailed data becomes available. The findings offer valuable insights into the complex interplay of factors influencing wage disparities across different sectors and demographic groups.