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Who’s Got the Power? Wage Determination and its Resilience in the Great Recession

Guest speaker

Hugo Vilares (FEP - UPorto)


Room -1.26 EEG UMinho & Online


Start17.04.2024 13:15End17.04.2024 14:15

Event summary


Hugo is a Labour Economist and an Applied Microeconometrician, with work published in the British Journal of Industrial Relations and the Journal of Econometrics. He is an Assistant Professor in Economics at FEP of University of Porto. He is affiliated at both the Centre for Economic Performance (LSE) and Cef.UP (U. Porto). He completed a PhD in Economics (2021) at London School of Economics. His doctoral studies have been funded by competitive grants of the Economic and Social Research Council (UK) and FCT (PT). Before the current assigment, he worked as teaching assistant at Nova SBE (2011/2013) and LSE (2016/2021), as Teaching Fellow in Managerial Economics and Strategy at LSE (2018/2022), and as an economist at the Research Departments of the Portuguese Securities and Exchange Commission (2013) and of the Bank of Portugal (2013/2015). Throughout the years, he has participated in several volunteering projects in Education, Human Rights, Humanitarian Relief and Economics areas.


Whereas wage inequality has risen markedly in most OECD countries in recent decades, it has fallen in several Southern European economies. To shed light on this phenomenon, we embed sectoral bargaining, which is common in Southern European economies, in a dynamic search and matching model. We estimate the model using comprehensive employer-employee data from Portugal for the last two decades and its data on collective bargaining agreements in different sectors, which allows us to assess the evolution of rent sharing. We find that since the mid-2000s, worker bargaining power has grown slightly at the bottom of the skill distribution while shrinking at the middle and top, contributing to the compression of the wage distribution. These changes, which persisted even during the Great Recession, increased the importance of sectoral bargaining in wage determination, weakened the relationship between wages and firm productivity, and reduced the assortative matching of workers to firms.

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