In the unionized private sector, the standard deviation across individual wage settlements fell by about a third, improving the efficiency of the labour market and the perception of fairness around wage setting.
In addition, since 1991, the average duration of labour contracts has almost doubled, from about 20 months to 39 months, and there has been less need for cost-of-living allowances (COLAs) in wage contracts (Chart 3). The number of labour contracts with COLA clauses has declined from 21 per cent to less than 5 per cent.