The state, wage-fixing and labour market reform: some international perspectives

Abstract

This article explores three main issues. First, it examines the changes which have occurred in the nature and scope of state intervention in pay fixing within the OECD during the past two decades. Second, it outlines the strategies which have been adopted recently by many western govern1nents to enhance wage flexibility and im.prove the operation of labour markets. Third, it critically assesses the merits of the Calmfors-Driffill thesis concerning the relationship between wage bargaining systems and macroeconomic performance. It is argued that there are good theoretical reasons as well as some strong empirical evidence to support the Calmfors-Driffill thesis, but that bargaining structures are only one of a multitude of factors which influence economic outcomes.