To Bind or Not to Bind Collectively? Decomposition of Bargained Wage Differences Using Counterfactual Distributions
AbstractCollective bargaining agreements still play an important role in the German wage setting system. Both existing theoretical and empirical studies find that collective bargaining leads to higher wages compared to individually agreed ones. However, the impact of collective bargaining on the wage level may be very different along the wage distribution. As unions aim at compressing the wage distribution, one might expect that for covered workers' wages in the lower part of the distribution workers' individual characteristics may be less important than the coverage by a collective contract. In contrast, the relative importance of workers' individual characteristics may rise in the upper part of the wage distribution, whereas the overall wage difference might decline. Using the newly available German Structure of Earnings Survey (GSES) 1995 and 2001, a cross-sectional linked employer-employee-dataset from German official statistics, this study analyses the difference between collectively and individually agreed wages using a Machado/Mata (2005) decomposition type technique.
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Bibliographic InfoPaper provided by Department of Economics, University of Hohenheim, Germany in its series Diskussionspapiere aus dem Institut für Volkswirtschaftslehre der Universität Hohenheim with number 294/2007.
Length: 41 pages
Date of creation: Dec 2007
Date of revision:
Contact details of provider:
Postal: D-70593 Stuttgart
Web page: http://www.uni-hohenheim.de/institution/institut-fuer-economics-11
More information through EDIRC
collective bargaining; wage structure; wage decomposition; quantile regression;
Other versions of this item:
- 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).
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
- C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-04-29 (All new papers)
- NEP-BEC-2008-04-29 (Business Economics)
- NEP-LAB-2008-04-29 (Labour Economics)
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