Pattern Bargaining and Wage Leadership in Austria

Several contributions to the economic literature on industrial relations claim that wage bargaining in Austria is characterised by pattern bargaining or wage leadership. This claim has, however, never been investigated empirically. This paper fills this gap by examining the development of contractual wage rates set in collective bargaining and of wage rates actually paid. Wage disparity has been high and rising over the last 20 years. This finding is incompatible with the claims of the proponents of pattern bargaining or wage leadership and suggests that wage differentials are not closely linked to productivity.