The Role of Workers' and Employers' Bargaining Power in 'Distributional Workplace Accounts'

Informations projet

DIWA

N° de convention de subvention: 101088062

DOI

10.3030/101088062

Date de signature de la CE 27 Mars 2023

Date de début 1 Septembre 2023

Date de fin 31 Août 2028

Financé au titre de

• European Research Council (ERC)

Coût total

€ 1 997 259,00

Contribution de l’UE

€ 1 997 259,00

Coordonné par

UNIVERSITY OF HAIFA
Israel

Periodic Reporting for period 1 - DIWA (The Role of Workers' and Employers' Bargaining Power in 'Distributional Workplace Accounts')

Période du rapport: 2023-09-01 au 2026-02-28

Résumé du contexte et des objectifs généraux du projet

Social science explanations for rising inequality are incomplete in two significant ways. First, they commonly study income inequality through the narrow prism of earnings, overlooking key sources originating in the labor market, such as employee benefits and corporate profits. Second, and related to the first, research on rising inequality is still frequently conducted at the individual or national levels, neglecting workplaces, and in particular power relations at work. Conflicts arise and compromises are forged not primarily at the national level but within specific institutional settings, including the workplace. As a consequence of these two limitations, social science explanations of rising inequality neglect the complex fabric of workers' and employers' relative bargaining power, their multidimensionality and interdependence, and their resulting incomes.

In the DIWA research project, we formulate an original account of income inequality that is new in two ways.
First, we develop an innovative approach to measuring income inequality that bridges the gap between studies on earnings, benefits, and labor's share inequalities and situates inequality within the workplaces that produce it. By constructing what we refer to as "distributional workplace accounts" (DIWA), we integrate personal, workplace, and functional income distributions to measure the distribution of labor income (wages and employer-provided fringe benefits), capital income (income from property and from self-owned business, corporate profits), and pretax factor income among (1) income classes according to adult individuals' ranked income, (2) production classes according to adult individuals' workplace ownership and employment status, and (3) social groups according to adult individuals' ethnicity and gender.
Second, we develop a new conceptualization of relative bargaining power, emphasizing its institutional and structural sources, as well as its multifaceted connections to income inequality. We then analyze the effect of proxies for workers' and employers' relative bargaining power—derived from collective agreements, institutional data, and network data—on DIWA across three countries and over the medium run.

Travail effectué depuis le début du projet jusqu’à la fin de la période considérée dans le rapport et principaux résultats atteints jusqu’à présent

During the first two years of this project, we made significant progress in achieving our objectives. We obtained permission to access restricted administrative data for Israel, the United States, and Denmark, and were fortunate to recruit an excellent research team to analyze the restricted data.
We began by constructing the distributional workplace accounts (DIWA) for Israel, utilizing individual tax records, workplace tax records, and linked employer-employee data collected by the Israeli Tax Authority. We also combined these data with population registers and imputed observations for non-tax filers. By integrating these sources, DIWA captures nearly 93% of the national income, which is directly observed at the individual or workplace level, as well as 100% of the national population.

Next, we examined income distribution by income classes, production classes, and social groups among adult Israelis using DIWA. Overall, we found that income inequality is higher than previously assumed, and the distribution of income among different groups varies from common perceptions.
Currently, we are in the process of constructing DIWA for the United States and Denmark. We are also developing proxies for the relative bargaining power of workers and employers based on the best available data for each country. This includes performing text analysis on the digitized texts of all Israeli collective agreements and building a comprehensive longitudinal dataset on US labor unions, as well as gathering data on Danish corporate networks.

Progrès au-delà de l’état des connaissances et impact potentiel prévu (y compris l’impact socio-économique et les conséquences sociétales plus larges du projet jusqu’à présent)

The results show a promising potential impact. We have identified income inequalities that are greater than previously assumed, and the distribution of income among various groups differs significantly from common perceptions. We are currently comparing three countries to analyze the changes in income inequality over time and between these nations. Both research tasks may contribute valuable insights into income inequality and help develop strategies to reduce disparities.