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How Does Government Wage Policy Affect Wage Bargaining in Brazil?

Brazilian Review of Econometrics

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Title How Does Government Wage Policy Affect Wage Bargaining in Brazil?
How Does Government Wage Policy Affect Wage Bargaining in Brazil?
 
Creator Gonzaga, Gustavo; Department of Economics, Pontificia Universidade Católica do Rio de Janeiro, Brazil.
Scandiuzzi, João Carlos; Department of Economics, Pontificia Universidade Católica do Rio de Janeiro, Brazil.
 
Subject Wage policy in Brazil; wage bargaining.
J5.
Wage policy in Brazil; wage bargaining.
J5.
 
Description Over the last thirty years, Brazil has had official wage policies, with the government determining the minimum rate of adjustment for all wages in the formal sector of the Brazilian economy. The rise in union activism after 1978 and the consequent gradual return of collective bargaining reduced the scope of influence by the government to determine the exact wage rate of the economy. Some authors viewed this phenomenon as a sign of decrease in the importance of the wage policy. In this paper, we argue instead that government wage policy remained important after the resurgence of union activism in Brazil, because it shifted the focus of discussion on the bargaining table to wage adjustment in excess of the official wage adjustment numbers. The importance of wage policy in affecting wage determination is theoretically examined by solving a right-tomanage model of wage bargaining. The innovation here is to consider the utility associated with the institutional wage as one of the components that form the union's fall-back utility level. Our main finding is that the institutional wage affects the result of the wage bargaining. We show that, in the most plausible case, a rise in the institutional wage raises the bargained wage, even though the effect is ambiguous in general. We conclude by arguing that empirical tests of the importance of wage policy in Brazil should take these theoretical considerations into account, instead of using ad-hoc models of wage determination, as had the previous empirical literature done in Brazil, which in most cases simply tested the null hypothesis of an unitary institutional wage coefficient.
Diversos autores argumentam que o renascimento do movimento sindicalista brasileiro a partir de 1978 reduziu a importância da política salarial do governo, a qual determina, desde 1965, a variação mínima de salários nominais para as trabalhadores brasileiros com vínculo formal. A análise conduzida nesse artigo sugere que a política salarial permaneceu importante no período após 1978, uma vez que apenas deslocou a negociação para reajustes salariais em excesso ao piso determinado pela legislação. O estudo é feito com base em um modelo de barganha salarial (right-to-manage model), no qual a política salarial é incorporada através do nível de utilidade de reserva (fall-back utility) dos sindicatos. O resultado principal é que, no caso mais plausível, o salário institucional aumenta o salário negociado. Os resultados sugerem que testes da efetividade da política salarial deveriam ser baseados em modelos teóricos do tipo aqui proposto e colocam em dúvida os resultados encontrados na maior parte da literatura empírica sobre o tema.
 
Publisher Sociedade Brasileira de Econometria
 
Date 1998-05-01
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
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Format application/pdf
 
Identifier http://bibliotecadigital.fgv.br/ojs/index.php/bre/article/view/2840
10.12660/bre.v18n11998.2840
 
Source Brazilian Review of Econometrics; Vol 18, No 1 (1998); 1-30
Brazilian Review of Econometrics; Vol 18, No 1 (1998); 1-30
1980-2447
 
Language eng
 
Relation http://bibliotecadigital.fgv.br/ojs/index.php/bre/article/view/2840/1752