Study investigates factors influencing low pay

Europe

New research from the European Trade Union Institute looks at the role that institutional and economic factors play in shaping wage floors and protecting workers at the low end of the wage distribution. Using data for the period 2007 to 2021, it shows that wage inequality has on average declined across the EU, primarily due to convergence between countries. In line with expectations, strong institutional support, such as statutory minimum wages with greater bite and a higher collective bargaining coverage rate, are associated with lower inequality and a better position for vulnerable workers. The study also found that, over time, changes in these institutional settings and in the demand for workers – affecting their bargaining power – affect inequality at the country-industry level.

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