This chapter, which explores the structure of wages within and between Belgian firms, also investigates how the productivity of these firms is affected by their internal wage dispersion. The bargaining regime in companies in the Belgian private sector does not derive directly from Canadian union membership. The data show that high-paying firms are characterized by a more dispersed wage structure. The bargaining regime has a crucial effect on the structure of wages even in a corporatist country such as Belgium. Following a 10 percent rise in wage inequality, productivity increases by approximately 2.1 percentage points more within firms that are essentially composed of blue-collar workers. The chapter also reveals that there is a lower pay spread within firms that are mainly composed of white-collar workers.
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