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Wage Distributions by Bargaining Regime: Linked Employer-Employee Data Evidence from Germany

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  • Kohn, Karsten

    ()
    (KfW Bankengruppe)

  • Lembcke, Alexander C.

    ()
    (CEP, London School of Economics)

Abstract

Using linked employer-employee data from the German Structure of Earnings Survey 2001, this paper provides a comprehensive picture of the wage structure in three wage-setting regimes prevalent in the German system of industrial relations. We analyze wage distributions for various labor market subgroups by means of kernel density estimation, variance decompositions, and individual and firm-level wage regressions. Unions' impact through collective and firm-level bargaining mainly works towards a higher wage level and reduced overall and residual wage dispersion. Yet observed effects are considerably heterogeneous across different labor market groups. There is no clear evidence for wage floors formed by collectively bargained low wage brackets which would operate as minimum wages for different groups of workers.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2849.

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Length: 31 pages
Date of creation: Jun 2007
Date of revision:
Publication status: published in: Allgemeines Statistisches Archiv/Journal of the German Statistical Society, 2007, 1 (3-4), 247-261
Handle: RePEc:iza:izadps:dp2849

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Related research

Keywords: wage equations; collective wage bargaining; wage structure; kernel density estimation; variance decomposition; German Structure of Earnings Survey;

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References

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  1. Knut Gerlach & Gesine Stephan, 2006. "Bargaining Regimes and Wage Dispersion," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 226(6), pages 629-645, November.
  2. Wolf Dieter Heinbach, 2006. "Bargained Wages in Decentralized Wage-Setting Regimes," Diskussionspapiere aus dem Institut für Volkswirtschaftslehre der Universität Hohenheim, Department of Economics, University of Hohenheim, Germany 276/2005, Department of Economics, University of Hohenheim, Germany.
  3. Gürtzgen, Nicole, 2005. "Rent-sharing : Does the Bargaining Regime Make a Difference? Theory and Empirical Evidence," ZEW Discussion Papers 05-15, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  4. Bernd Fitzenberger & Karsten Kohn & Qingwei Wang, 2011. "The erosion of union membership in Germany: determinants, densities, decompositions," Journal of Population Economics, Springer, Springer, vol. 24(1), pages 141-165, January.
  5. David Card & Sara de la Rica, 2006. "Firm-level contracting and the structure of wages in Spain," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 59(4), pages 573-592, July.
  6. Oswald, Andrew J, 1985. " The Economic Theory of Trade Unions: An Introductory Survey," Scandinavian Journal of Economics, Wiley Blackwell, Wiley Blackwell, vol. 87(2), pages 160-93.
  7. Fitzenberger, Bernd & Kohn, Karsten, 2006. "Gleicher Lohn für gleiche Arbeit? Zum Zusammenhang zwischen Gewerkschaftsmitgliedschaft und Lohnstruktur in Westdeutschland 1985?1997," ZEW Discussion Papers 06-06, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  8. Addison, John T. & Teixeira, Paulino & Zwick, Thomas, 2006. "Works councils and the anatomy of wages," ZEW Discussion Papers 06-86, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  9. Ana Rute Cardoso & Pedro Portugal, 2005. "Contractual Wages and the Wage Cushion under Different Bargaining Settings," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 23(4), pages 875-902, October.
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Cited by:
  1. Bernd Fitzenberger & Karsten Kohn & Alexander Lembcke, 2008. "Union density and varieties of coverage: the anatomy of union wage effects in Germany," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 19622, London School of Economics and Political Science, LSE Library.
  2. repec:iab:iabzaf:v:44:i:1/2:p:163-172 is not listed on IDEAS
  3. Karsten Kohn & Alexander Lembcke, 2007. "Wage distributions by bargaining regime," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer, Springer, vol. 1(3), pages 247-261, December.
  4. Michael C. Burda & Bernd Fitzenberger & Alexander Lembcke & Thorsten Vogel, 2008. "Unionization, Stochastic Dominance, and Compression of the Wage Distribution: Evidence from Germany," SFB 649 Discussion Papers SFB649DP2008-041, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.

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