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Paying more than necessary? The wage cushion in Germany

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Author Info
Jung, Sven
Schnabel, Claus

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Abstract

Using a representative establishment data set for Germany, we show that more than 40 percent of plants covered by collective agreements pay wages above the level stipulated in the agreement, which gives rise to a wage cushion between the levels of actual and contractual wages. Cross-sectional and fixed-effects estimations for the period 2001-2006 indicate that the wage cushion mainly varies with the profit situation of the plant and with indicators of labour shortage and the business cycle. While plants bound by multi-employer sectoral agreements seem to pay wage premiums in order to overcome the restrictions imposed by the rather centralized system of collective bargaining in Germany, plants which make use of single-employer agreements are significantly less likely to have wage cushions. ; Anhand von repräsentativen Daten des IAB-Betriebs-panels zeigen wir, dass über 40 Prozent der tarifgebundenen Betriebe in Deutschland höhere Löhne als im Tarifvertrag festgelegt zahlen, was zu einer Lohnspanne (bzw. einem Lohnpuffer) zwischen Effektiv- und Tariflöhnen führt. Querschnitts- und Fixe-Effekte-Schätzungen für den Zeitraum 2001-2006 deuten darauf hin, dass die übertarifliche Entlohnung hauptsächlich mit der Ertragslage des Betriebes und mit Indikatoren der Arbeitskräfteknappheit und des Konjunkturzyklus variiert. Während an Flächentarifverträge gebundene Betriebe über Tarif entlohnen dürften, um Beschränkungen zu überwinden, die ihnen durch das relativ zentrali-sierte Tarifverhandlungssystem in Deutschland auferlegt werden, weisen Betriebe mit Firmentarifverträgen wesentlich seltener eine übertarifliche Entlohnung auf. --

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Paper provided by Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics in its series Discussion Papers with number 63.

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Date of creation: 2009
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Handle: RePEc:zbw:faulre:63

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Related research
Keywords: wages; wage cushion; wage determination; bargaining; Germany;

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Find related papers by JEL classification:
J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Hibbs, Douglas Jr. & Locking, Hakan, 1996. "Wage compression, wage drift and wage inflation in Sweden," Labour Economics, Elsevier, vol. 3(2), pages 109-141, September. [Downloadable!] (restricted)
  2. Olaf H¸bler & Uwe Jirjahn, 2003. "Works Councils and Collective Bargaining in Germany: The Impact on Productivity and Wages," Scottish Journal of Political Economy, Scottish Economic Society, vol. 50(4), pages 471-491, 09. [Downloadable!] (restricted)
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  3. Bastos, Paulo & Monteiro, Natália P. & Straume, Odd Rune, 2009. "Firm heterogeneity and wages in unionised labour markets: Theory and evidence," Labour Economics, Elsevier, vol. 16(4), pages 440-450, August. [Downloadable!] (restricted)
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  4. Gesine Stephan & Knut Gerlach, 2005. "Wage settlements and wage setting: results from a multi-level model," Applied Economics, Taylor and Francis Journals, vol. 37(20), pages 2297-2306, November. [Downloadable!] (restricted)
  5. Muysken, Joan & van Veen, Tom, 1996. " Efficiency Wages and Local Wage Bargaining," Scandinavian Journal of Economics, Blackwell Publishing, vol. 98(1), pages 119-27, March.
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  1. John T. Addison & Alex Bryson & Paulino Teixeira & André Pahnke & Lutz Bellmann, 2009. "The Extent of Collective Bargaining and Workplace Representation: Transitions between States and their Determinants. A Comparative Analysis of Germany and Great Britain," GEMF Working Papers 2009-14, GEMF - Faculdade de Economia, Universidade de Coimbra. [Downloadable!]
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