Advanced Search
MyIDEAS: Login to save this article or follow this journal

Union Density and Varieties of Coverage: The Anatomy of Union Wage Effects in Germany

Contents:

Author Info

  • Bernd Fitzenberger
  • Karsten Kohn
  • Alexander C. Lembcke

Abstract

Collective bargaining in Germany takes place at either industry or firm level. Collective bargaining coverage is much higher than union density. The share of employees covered by collective bargaining in a single firm can vary between 0% and 100%. This institutional setup suggests that researchers should explicitly distinguish union density, coverage rate at the firm level, and coverage at the individual level. Using linked employer-employee data, we estimate OLS and quantile regressions of wages on these dimensions of union influence. A higher share of employees in a firm covered by industry-wide or firm-specific contracts is associated with higher wages, but there is no clear-cut effect on wage dispersion. Yet, holding coverage at the firm level constant, individual bargaining coverage is associated with a lower wage level and less wage dispersion. A higher union density reinforces the effects of coverage, but the effect of union density is negative at all points of the wage distribution for employees who work in firms without coverage by collective bargaining. Higher union density thus compresses the wage distribution while moving the distribution in firms without coverage uniformly leftwards.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://digitalcommons.ilr.cornell.edu/ilrreview/vol66/iss1/5
Download Restriction: At http://digitalcommons.ilr.cornell.edu/ilrreview/, all visitors can get free full text downloads of articles published between April 2003 and 18 months prior to today's date. A subscription is required for full-text downloads of more recent articles. Researchers can find older issues of the Review at http://www.jstore.org.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by ILR Review, Cornell University, ILR School in its journal ILR Review.

Volume (Year): 66 (2013)
Issue (Month): 1 (January)
Pages: 169-197

as in new window
Handle: RePEc:ilr:articl:v:66:y:2013:i:1:p:169-197

Contact details of provider:
Fax: 607-255-8016
Web page: http://www.ilr.cornell.edu/ilrreview/
More information through EDIRC

Order Information:
Postal: 381 Ives East, Cornell University, Ithaca, NY 14853-3901
Email:
Web: http://digitalcommons.ilr.cornell.edu/ilrreview/

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Richard B. Freeman, 1982. "Union wage practices and wage dispersion within establishments," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 36(1), pages 3-21, October.
  2. Goerke, Laszlo & Pannenberg, Markus, 2003. "Norm-Based Trade Union Membership: Evidence for Germany," IZA Discussion Papers 962, Institute for the Study of Labor (IZA).
  3. Schnabel, Claus & Wagner, Joachim, 2003. "Trade Union Membership in Eastern and Western Germany: Convergence or Divergence?," IZA Discussion Papers 707, Institute for the Study of Labor (IZA).
  4. Karsten Kohn & Alexander Lembcke, 2007. "Wage distributions by bargaining regime: linked employer-employee data evidence from Germany," LSE Research Online Documents on Economics 19699, London School of Economics and Political Science, LSE Library.
  5. Booth, Alison L, 1985. "The Free Rider Problem and a Social Custom Model of Trade Union Membership," The Quarterly Journal of Economics, MIT Press, vol. 100(1), pages 253-61, February.
  6. Bauer, Thomas K. & Bonin, Holger & Sunde, Uwe, 2003. "Real and Nominal Wage Rigidities and the Rate of Inflation: Evidence from West German Micro Data," IZA Discussion Papers 959, Institute for the Study of Labor (IZA).
  7. Fitzenberger, Bernd & Beck, Martin, 2003. "Changes in Union Membership Over Time: A Panel Analysis for West Germany," ZEW Discussion Papers 03-42, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  8. Karsten Kohn & Alexander Lembcke, 2007. "Wage distributions by bargaining regime," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer, vol. 1(3), pages 247-261, December.
  9. Dustmann, Christian & Schönberg, Uta, 2004. "Training and Union Wages," IZA Discussion Papers 1435, Institute for the Study of Labor (IZA).
  10. Joshua Angrist & Victor Chernozhukov & Ivan Fernandez-Val, 2004. "Quantile Regression under Misspecification, with an Application to the U.S. Wage Structure," NBER Working Papers 10428, National Bureau of Economic Research, Inc.
  11. Dell'Aringa, Carlo & Lucifora, Claudio, 1994. "Collective bargaining and relative earnings in Italy," European Journal of Political Economy, Elsevier, vol. 10(4), pages 727-747, December.
  12. Robinson, Chris, 1989. "The Joint Determination of Union Status and Union Wage Effects: Some Tests of Alternative Models," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 639-67, June.
  13. Stewart, Mark B, 1987. "Collective Bargaining Arrangements, Closed Shops and Relative Pay," Economic Journal, Royal Economic Society, vol. 97(385), pages 140-56, March.
  14. David Card & Sara de la Rica, 2006. "Firm-level contracting and the structure of wages in Spain," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 59(4), pages 573-592, July.
  15. Bernd Fitzenberger & Karsten Kohn & Qingwei Wang, 2011. "The erosion of union membership in Germany: determinants, densities, decompositions," Journal of Population Economics, Springer, vol. 24(1), pages 141-165, January.
  16. Berndt Keller, 2005. "Union Formation through Merger: The Case of Ver.di in Germany," British Journal of Industrial Relations, London School of Economics, vol. 43(2), pages 209-232, 06.
  17. Hartog, Joop & Leuven, Edwin & Teulings, Coen N, 1997. "Wages and the Bargaining Regime in a Corporatist Setting: The Netherlands," CEPR Discussion Papers 1706, C.E.P.R. Discussion Papers.
  18. Andrews, Martyn J. & Stewart, Mark B. & Swaffield, Joanna K. & Upward, Richard, 1998. "The estimation of union wage differentials and the impact of methodological choices," Labour Economics, Elsevier, vol. 5(4), pages 449-474, December.
  19. Addison, John T. & Teixeira, Paulino & Zwick, Thomas, 2006. "Works councils and the anatomy of wages," ZEW Discussion Papers 06-86, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  20. Agell, J. & Lommerud, K.E., 1990. "Union Egalitarianism As Income Insurance," Papers 1990a, Uppsala - Working Paper Series.
  21. José Mata & José A. F. Machado, 2005. "Counterfactual decomposition of changes in wage distributions using quantile regression," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(4), pages 445-465.
  22. Luigi Guiso & Luigi Pistaferri & Fabiano Schivardi, 2001. "Insurance within the Firm," Temi di discussione (Economic working papers) 414, Bank of Italy, Economic Research and International Relations Area.
  23. Moulton, Brent R, 1990. "An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Unit," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 334-38, May.
  24. Gesine Stephan & Knut Gerlach, 2005. "Wage settlements and wage setting: results from a multi-level model," Applied Economics, Taylor & Francis Journals, vol. 37(20), pages 2297-2306.
  25. Wolf Dieter Heinbach & Markus Spindler, 2007. "To Bind or Not to Bind Collectively? Decomposition of Bargained Wage Differences Using Counterfactual Distributions," IAW Discussion Papers 36, Institut für Angewandte Wirtschaftsforschung (IAW).
  26. Lars Calmfors, 1993. "Centralisation of Wage Bargaining and Macroeconomic Performance: A Survey," OECD Economics Department Working Papers 131, OECD Publishing.
  27. Card, David, 1996. "The Effect of Unions on the Structure of Wages: A Longitudinal Analysis," Econometrica, Econometric Society, vol. 64(4), pages 957-79, July.
  28. Fitzenberger, Bernd & Kohn, Karsten, 2006. "Gleicher Lohn für gleiche Arbeit? Zum Zusammenhang zwischen Gewerkschaftsmitgliedschaft und Lohnstruktur in Westdeutschland 1985?1997," ZEW Discussion Papers 06-06, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  29. John DiNardo & David S. Lee, 2004. "Economic Impacts of Unionization on Private Sector Employers: 1984-2001," NBER Working Papers 10598, National Bureau of Economic Research, Inc.
  30. Edward J. Schumacher, 1999. "What Explains Wage Differences Between Union Members and Covered Nonmembers?," Southern Economic Journal, Southern Economic Association, vol. 65(3), pages 493-512, January.
  31. Ana Rute Cardoso & Pedro Portugal, 2005. "Contractual Wages and the Wage Cushion under Different Bargaining Settings," Journal of Labor Economics, University of Chicago Press, vol. 23(4), pages 875-902, October.
  32. Freeman, Richard B & Medoff, James L, 1981. "The Impact of the Percentage Organized on Union and Nonunion Wages," The Review of Economics and Statistics, MIT Press, vol. 63(4), pages 561-72, November.
  33. Wolf Dieter Heinbach, 2006. "Bargained Wages in Decentralized Wage-Setting Regimes," IAW Discussion Papers 26, Institut für Angewandte Wirtschaftsforschung (IAW).
  34. Blakemore, Arthur E & Hunt, Janet C & Kiker, B F, 1986. "Collective Bargaining and Union Membership Effects on the Wages of Male Youths," Journal of Labor Economics, University of Chicago Press, vol. 4(2), pages 193-211, April.
  35. Oswald, Andrew J, 1985. " The Economic Theory of Trade Unions: An Introductory Survey," Scandinavian Journal of Economics, Wiley Blackwell, vol. 87(2), pages 160-93.
  36. Olaf H¸bler & Uwe Jirjahn, 2003. "Works Councils and Collective Bargaining in Germany: The Impact on Productivity and Wages," Scottish Journal of Political Economy, Scottish Economic Society, vol. 50(4), pages 471-491, 09.
  37. Büttner, Thiess & Fitzenberger, Bernd, 1998. "Central wage bargaining and local wage flexibility: evidence from the entire wage distribution," ZEW Discussion Papers 98-39, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  38. Knut Gerlach & Gesine Stephan, 2006. "Bargaining Regimes and Wage Dispersion," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 226(6), pages 629-645, November.
  39. Robert J. Flanagan, 1999. "Macroeconomic Performance and Collective Bargaining: An International Perspective," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1150-1175, September.
  40. John DiNardo & David S. Lee, 2004. "Economic Impacts of New Unionization On Private Sector Employers: 1984-2001," The Quarterly Journal of Economics, MIT Press, vol. 119(4), pages 1383-1441, November.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ilr:articl:v:66:y:2013:i:1:p:169-197. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ILR Review).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.