Ortigueira, SalvadorUniversidad Carlos III de Madrid. Departamento de Economía2011-10-112011-10-112011-08-292340-5031https://hdl.handle.net/10016/12264During the three decades spanning the early 50’s to the early 80’s, the wagesetting process in most Northern European countries was dominated by centralized bargaining, where peak level labor and employer associations set wages nationwide. In the early 80’s centralized wage bargaining began to collapse. In this paper we assess a novel explanation both for the initial establishment of a centralized wagesetting process, and for its subsequent collapse. According to our theory, centralized wage bargaining was set up as a response to the spillovers created by the unemployment benefit program. Its collapse was the result of the increase in the productivity gap across workers, brought about by equipment-specific technological progress and equipment-skill complementarityapplication/pdfengAtribución-NoComercial-SinDerivadas 3.0 EspañaWage-Bargaining ArrangementsUnemployment BenefitsEquipment-Specific Technological ProgressEquipment-Skill Complementarityworking paperJ31J41J51Economíaopen accessDT/0000000907we1129