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Wage Posting or Wage Bargaining? Evidence from the Employers' Side

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Author Info

  • Brenzel, Hanna

    ()
    (Institute for Employment Research (IAB), Nuremberg)

  • Gartner, Hermann

    ()
    (Institute for Employment Research (IAB), Nuremberg)

  • Schnabel, Claus

    ()
    (University of Erlangen-Nuremberg)

Abstract

Using a representative establishment dataset, this paper is the first to analyze the incidence of wage posting and wage bargaining in the matching process from the employer's side. We show that both modes of wage determination coexist in the German labor market, with about two-thirds of hirings being characterized by wage posting. Wage posting dominates in the public sector, in larger firms, in firms covered by collective agreements, and in part-time and fixed-term contracts. Job-seekers who are unemployed, out of the labor force or just finished their apprenticeship are also less likely to get a chance of negotiating. Wage bargaining is more likely for more-educated applicants and in jobs with special requirements as well as in tight regional labor markets.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7624.

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Length: 25 pages
Date of creation: Sep 2013
Date of revision:
Publication status: published in: Labour Economics, 2014, 29, 41-48
Handle: RePEc:iza:izadps:dp7624

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Keywords: hiring; wage bargaining; wage posting; matching; Germany;

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References

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  1. Vera Brenčič, 2012. "Wage posting: evidence from job ads," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 45(4), pages 1529-1559, November.
  2. Jung, Sven & Schnabel, Claus, 2009. "Paying more than necessary? The wage cushion in Germany," Discussion Papers 63, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  3. Lawrence J. Christiano & Martin Eichenbaum & Charles Evans, 2001. "Nominal Rigidities and the Dynamic Effects of a Shock to Monetary Policy," NBER Working Papers 8403, National Bureau of Economic Research, Inc.
  4. Daron Acemoglu & Robert Shimer, 1998. "Holdups and Efficiency with Search Frictions," Working papers, Massachusetts Institute of Technology (MIT), Department of Economics 98-14, Massachusetts Institute of Technology (MIT), Department of Economics.
  5. Ellingsen, Tore & Rosén, Åsa, 1997. "Fixed or Flexible? Wage Setting in Search Equilibrium," Working Paper Series, Uppsala University, Department of Economics 1997:17, Uppsala University, Department of Economics.
  6. Hermann Gartner & Thorsten Schank & Claus Schnabel, 2013. "Wage Cyclicality Under Different Regimes of Industrial Relations," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, Wiley Blackwell, vol. 52(2), pages 516-540, 04.
  7. Burdett, Kenneth & Mortensen, Dale T, 1998. "Wage Differentials, Employer Size, and Unemployment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(2), pages 257-73, May.
  8. Claudio Michelacci & Javier Suarez, 2006. "Incomplete Wage Posting," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 114(6), pages 1098-1123, December.
  9. Robert Shimer, 2005. "The Cyclical Behavior of Equilibrium Unemployment and Vacancies," American Economic Review, American Economic Association, American Economic Association, vol. 95(1), pages 25-49, March.
  10. Moen, Espen R, 1997. "Competitive Search Equilibrium," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 105(2), pages 385-411, April.
  11. Robert E. Hall & Alan B. Krueger, 2010. "Evidence on the Determinants of the Choice between Wage Posting and Wage Bargaining," NBER Working Papers 16033, National Bureau of Economic Research, Inc.
  12. Andreas Leibbrandt & John A. List, 2012. "Do Women Avoid Salary Negotiations? Evidence from a Large Scale Natural Field Experiment," NBER Working Papers 18511, National Bureau of Economic Research, Inc.
  13. Robert E. Hall & Alan B. Krueger, 2012. "Evidence on the Incidence of Wage Posting, Wage Bargaining, and On-the-Job Search," American Economic Journal: Macroeconomics, American Economic Association, vol. 4(4), pages 56-67, October.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Are wages posted or bargained?
    by Economic Logician in Economic Logic on 2013-11-06 16:11:00
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Cited by:
  1. Schwengler, Barbara, 2013. "Einfluss der europäischen Regionalpolitik auf die deutsche Regionalförderung," IAB Discussion Paper 201318, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  2. Bauer, Angela & Kruppe, Thomas, 2013. "Policy Styles : zur Genese des Politikstilkonzepts und dessen Einbindung in Evaluationsstudien," IAB Discussion Paper 201322, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

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