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Do Unions and Works Councils Really Dampen the Gender Pay Gap? Discordant Evidence from Germany

Author

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  • Oberfichtner, Michael

    (Institute for Employment Research (IAB), Nuremberg)

  • Schnabel, Claus

    (University of Erlangen-Nuremberg)

  • Töpfer, Marina

    (University of Erlangen-Nuremberg)

Abstract

Using a large employer-employee dataset, we provide new evidence on the relationship between the gender pay gap and industrial relations from within German workplaces. Controlling for unobserved workplace heterogeneity, we find no evidence that introducing or abandoning collective agreements or works councils affects the gender pay gap. This result holds at the mean and along the distribution, challenging the stylized fact that unions and works councils dampen the gender pay gap.

Suggested Citation

  • Oberfichtner, Michael & Schnabel, Claus & Töpfer, Marina, 2020. "Do Unions and Works Councils Really Dampen the Gender Pay Gap? Discordant Evidence from Germany," IZA Discussion Papers 13576, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp13576
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    References listed on IDEAS

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    1. Fortin, Nicole & Lemieux, Thomas & Firpo, Sergio, 2011. "Decomposition Methods in Economics," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 1, pages 1-102, Elsevier.
    2. Francine D. Blau & Lawrence M. Kahn, 2017. "The Gender Wage Gap: Extent, Trends, and Explanations," Journal of Economic Literature, American Economic Association, vol. 55(3), pages 789-865, September.
    3. John T. Addison & Paulino Teixeira & Thomas Zwick, 2010. "German Works Councils and the Anatomy of Wages," ILR Review, Cornell University, ILR School, vol. 63(2), pages 247-270, January.
    4. Benjamin Bruns, 2019. "Changes in Workplace Heterogeneity and How They Widen the Gender Wage Gap," American Economic Journal: Applied Economics, American Economic Association, vol. 11(2), pages 74-113, April.
    5. Gartner, Hermann, 2005. "The imputation of wages above the contribution limit with the German IAB employment sample," FDZ Methodenreport 200502_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
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    7. Francine D. Blau & Lawrence M. Kahn, 2003. "Understanding International Differences in the Gender Pay Gap," Journal of Labor Economics, University of Chicago Press, vol. 21(1), pages 106-144, January.
    8. Bernd Fitzenberger & Aderonke Osikominu & Robert Völter, 2006. "Imputation Rules to Improve the Education Variable in the IAB Employment Subsample," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 126(3), pages 405-436.
    9. Klosterhuber, Wolfram & Lehnert, Patrick & Seth, Stefan, 2017. "Linked employer-employee data from the IAB: LIAB cross-sectional model 2 1993-2014 (LIAB QM2 9314)," FDZ Datenreport. Documentation on Labour Market Data 201605_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    10. Anja Heinze & Elke Wolf, 2010. "The intra-firm gender wage gap: a new view on wage differentials based on linked employer–employee data," Journal of Population Economics, Springer;European Society for Population Economics, vol. 23(3), pages 851-879, June.
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    Cited by:

    1. Bonaccolto-Töpfer, Marina & Briel, Stephanie, 2022. "The gender pay gap revisited: Does machine learning offer new insights?," Labour Economics, Elsevier, vol. 78(C).
    2. Strittmatter, Anthony & Wunsch, Conny, 2021. "The Gender Pay Gap Revisited with Big Data: Do Methodological Choices Matter?," Working papers 2021/05, Faculty of Business and Economics - University of Basel.
    3. Boris Hirsch & Philipp Lentge, 2022. "Non‐base compensation and the gender pay gap," LABOUR, CEIS, vol. 36(3), pages 277-301, September.
    4. Kovalenko, Tim & Töpfer, Marina, 2021. "Cyclical dynamics and the gender pay gap: A structural VAR approach," Economic Modelling, Elsevier, vol. 99(C).
    5. Hirsch, Boris & Lentge, Philipp, 2021. "Non-Base Compensation and the Gender Pay Gap," IZA Discussion Papers 14551, Institute of Labor Economics (IZA).
    6. Boris Hirsch & Philipp Lentge, 2021. "Non-Base Compensation and the Gender Pay Gap," Working Paper Series in Economics 404, University of Lüneburg, Institute of Economics.
    7. Mohrenweiser, Jens, 2022. "Works Councils," GLO Discussion Paper Series 1103, Global Labor Organization (GLO).

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    More about this item

    Keywords

    works council; industrial relations; gender pay gap; collective bargaining; Germany;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

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