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Wage bargaining in Germany : the role of works councils and opening clauses

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Author Info

  • Ellguth, Peter

    ()
    (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])

  • Gerner, Hans-Dieter

    ()
    (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])

  • Stegmaier, Jens

    ()
    (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])

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    Abstract

    "German employment relations are characterized by a distinct dual system: First, working conditions and wages are determined by industry level collective bargaining agreements. Second, on the establishment level the works council is responsible for employer-employee negotiations. But since the mid-1980s more and more areas of regulation were transferred from the industry to the establishment level using so called opening-clauses. Our analysis relies on rich German establishment data and reveals new insights in the institutional machinery of wage bargaining: While the existence of such clauses is related to higher wages (11 %), their application results in wages cuts of roughly the same size. Regarding works councils our results suggest that they are able to prevent negative wage effects of opening clauses on average." (Author's abstract, IAB-Doku) ((en))

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    Bibliographic Info

    Paper provided by Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany] in its series IAB Discussion Paper with number 201205.

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    Length: 21 pages
    Date of creation: 08 Mar 2012
    Date of revision:
    Handle: RePEc:iab:iabdpa:201205

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    Related research

    Keywords: Tarifverhandlungen; Tarifvertrag; Betriebsrat; Lohnfindung; Öffnungsklausel; IAB-Betriebspanel;

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    References

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    1. Addison, John T & Schnabel, Claus & Wagner, Joachim, 2001. "Work Councils in Germany: Their Effects on Establishment Performance," Oxford Economic Papers, Oxford University Press, vol. 53(4), pages 659-94, October.
    2. John T. Addison & Thorsten Schank & Claus Schnabel & Joachim Wagner, 2006. "Works Councils in the Production Process," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 126(2), pages 251-283.
    3. Addison, John T. & Schnabel, Claus & Wagner, Joachim, 2003. "The course of research into the economic consequences of German works councils," Discussion Papers 22, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    4. Hirsch, Boris & Schank, Thorsten & Schnabel, Claus, 2009. "Works Councils and Separations: Voice, Monopoly, and Insurance Effects," IZA Discussion Papers 4126, Institute for the Study of Labor (IZA).
    5. John T. Addison & Paulino Teixeira & Thomas Zwick, 2010. "German Works Councils and the Anatomy of Wages," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 63(2), pages 247-270, January.
    6. Richard B. Freeman & James L. Medoff, 1979. "The Two Faces of Unionism," NBER Working Papers 0364, National Bureau of Economic Research, Inc.
    7. John Addison & Stanley Siebert & Joachim Wagner & Xiangdong Wei, 2000. "Worker Participation and Firm Performance: Evidence from Germany and Britain," British Journal of Industrial Relations, London School of Economics, vol. 38(1), pages 7-48, 03.
    8. Addison, John T. & Bellmann, Lutz & Schnabel, Claus & Wagner, Joachim, 2002. "The reform of the German works constitution act: a critical assessment," Discussion Papers 16, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    9. Kornelius Kraft & Julia Lang, 2008. "The Causes and Consequences of Adopting a Works Council," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 228(5+6), pages 512-532, December.
    10. Jens Mohrenweiser & Paul Marginson & Uschi Backes-Gellner, 2009. "What Triggers the Establishment of a Works Council?," Working Papers 0101, University of Zurich, Institute for Strategy and Business Economics (ISU), revised Jul 2010.
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    Cited by:
    1. Uwe Jirjahn, 2012. "Industrielle Beziehungen und Innovationserfolg," Research Papers in Economics 2012-02, University of Trier, Department of Economics.
    2. Deeke, Axel & Baas, Meike, 2012. "Berufliche Statusmobilität von Arbeitslosen nach beruflicher Weiterbildung : ein empirischer Beitrag zur Evaluation der Förderung beruflicher Weiterbildung," IAB Discussion Paper 201211, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

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