The paper investigates the influence of three different wage-setting regimes (industry-wide collective contracts, firm-level contracts, and individual contracts) on the level and the dispersion of wages. The analysis uses the Salary and Wage Structure Survey for Lower Saxony, Germany. The empirical results show an increasing dispersion of wages over time in all wage-setting regimes. However, wage dispersion for firms applying industry-wide collective contracts remains considerably lower than for companies in the other two regimes. The observed increase of average wages between 2001 and 2006 in establishments covered by sectoral collective contracts - compared to wage reductions in the other wage-setting regimes - is accompanied by a sharp fall in collective bargaining coverage.
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Johannes Gernandt & Friedhelm Pfeiffer, 2007.
"Rising Wage Inequality in Germany,"
SOEPpapers
14, DIW Berlin, The German Socio-Economic Panel (SOEP).
[Downloadable!]
Other versions:
Gernandt, Johannes & Pfeiffer, Friedhelm, 2006.
"Rising Wage Inequality in Germany,"
ZEW Discussion Papers
06-19 [rev.], ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
[Downloadable!]
Pfeiffer, Friedhelm & Gernandt, Johannes, 2007.
"Rising Wage Inequality in Germany,"
ZEW Discussion Papers
06-019 [rev.2], ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
[Downloadable!]
Gernandt, Johannes & Pfeiffer, Friedhelm, 2006.
"Rising Wage Inequality in Germany,"
ZEW Discussion Papers
06-19, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
[Downloadable!]