We investigate the effects of the compression of wage differentials through centralized wage-setting in a context where growth depends on the continual reallocation of labor from older, less productive plants to new, more productive plants. We first compare plant-level and centralized wage...

This paper compares the political support for a targeted and a universalistic welfare policy in a model in which incomes are stochastic (so that welfare policies have an insurance benefit) and unequal ex ante (so that welfare policies have a redistributive effect). With self-interested voting,...

It is commonly argued that wage-setting is everywhere becoming less centralized due to changes in production, occupational structure, and economic integration. In this paper we present new data on the extent to which wage-setting institutions have changed since 1950 in countries in the northern...