Collective Bargaining Through the Magnifying Glass : A Comparison between the Netherlands and Portugal

Since the global financial crisis, sector-level bargaining has come under renewed scrutiny.While in Southern Europe, the crisis raised concerns about the role of collectivebargaining as an obstacle to labor market adjustment, in Northern Europe it was perceivedmore favourably and, according to some, may even have helped to weather the fallout ofthe crisis more easily. This paper seeks to contribute to a deeper understanding ofsector-level bargaining systems and their role for labor market performance. We comparetwo countries with seemingly similar collective bargaining systems, the Netherlands andPortugal, and document a number of features that may affect labor market outcomes,including: i) the scope for flexibility at the firm or worker level within sector-levelagreements; ii) the emphasis on representativeness as a criterion for extensions; iii) theeffectiveness of coordination across bargaining units; and iv) pro-active governmentpolicies to enhance trust and cooperation between the social partners