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Firm Wage Premia, Industrial Relations, and Rent Sharing in Germany

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  • Hirsch, Boris

    (Leuphana University Lüneburg)

  • Müller, Steffen

    (IWH Halle)

Abstract

This paper investigates the influence of industrial relations on firm wage premia in Germany. OLS regressions for the firm effects from a two-way fixed effects decomposition of workers' wages by Card, Heining, and Kline (2013) document that average premia are larger in firms bound by collective agreements and in firms with a works council, holding constant firm performance. RIF regressions show that premia are less dispersed among covered firms but more dispersed among firms with a works council. Hence, deunionization is the only among the suspects investigated that contributes to explaining the marked rise in the premia dispersion over time.

Suggested Citation

  • Hirsch, Boris & Müller, Steffen, 2018. "Firm Wage Premia, Industrial Relations, and Rent Sharing in Germany," IZA Discussion Papers 11309, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp11309
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    Cited by:

    1. Henry S Farber & Daniel Herbst & Ilyana Kuziemko & Suresh Naidu, 2021. "Unions and Inequality over the Twentieth Century: New Evidence from Survey Data," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 136(3), pages 1325-1385.
    2. Winkler, Erwin, 2020. "Diverging paths: Labor reallocation, sorting, and wage inequality," VfS Annual Conference 2020 (Virtual Conference): Gender Economics 224535, Verein für Socialpolitik / German Economic Association.
    3. Daniel Baumgarten & Gabriel Felbermayr & Sybille Lehwald, 2020. "Dissecting Between‐Plant and Within‐Plant Wage Dispersion: Evidence from Germany," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 59(1), pages 85-122, January.
    4. Daniel Baumgarten & Sybille Lehwald, 2019. "Trade Exposure and the Decline in Collective Bargaining: Evidence from Germany," CESifo Working Paper Series 7754, CESifo.
    5. Ellguth Peter & Kohaut Susanne, 2019. "A Note on the Decline of Collective Bargaining Coverage: The Role of Structural Change," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 239(1), pages 39-66, January.
    6. Müller, Steffen & Dettmann, Eva & Fackler, Daniel & Neuschäffer, Georg & Slavtchev, Viktor & Leber, Ute & Schwengler, Barbara, 2018. "Lohnunterschiede zwischen Betrieben in Ost- und Westdeutschland: Ausmaß und mögliche Erklärungsfaktoren. Ergebnisse aus dem IAB-Betriebspanel 2017," IAB-Forschungsbericht 201806, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    7. Julián Martinez Correa & Carlo Lombardo & Belén Bentivegna, 2018. "Convenio Colectivo, Sindicatos y Dispersión Salarial: Evidencia de Argentina," CEDLAS, Working Papers 0232, CEDLAS, Universidad Nacional de La Plata.
    8. Mertens, Matthias, 2019. "Micro-mechanisms behind declining labour shares: Market power, production processes, and global competition," IWH-CompNet Discussion Papers 3/2019, Halle Institute for Economic Research (IWH).
    9. Thang Ngoc Bach & Canh Quang Le & Thang Van Nguyen, 2021. "Rent Sharing, Investment, and Collective Bargaining: Evidence from Employee‐Level Data in Vietnam," The Developing Economies, Institute of Developing Economies, vol. 59(1), pages 3-38, March.

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    More about this item

    Keywords

    rent sharing; bargaining power; works councils; trade unions; industrial relations; firm wage premium; wage inequality; Germany;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence

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