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Wage cyclicality under different regimes of industrial relations

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  • Gartner, Hermann
  • Schank, Thorsten
  • Schnabel, Claus

Abstract

Since there is scant evidence on the role of industrial relations in wage cyclicality, this paper analyzes the effect of collective wage contracts and of works councils on real wage growth. Using linked employer-employee data for western Germany, we find that works councils affect wage growth only in combination with collective bargaining. Wage adjustments to positive and negative economic shocks are not always symmetric. Only under sectoral bargaining there is a (nearly symmetric) reaction to rising and falling unemployment. In contrast, wage growth in establishments without collective bargaining adjusts only to falling unemployment and is unaffected by rising unemployment. --

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Bibliographic Info

Paper provided by Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics in its series Discussion Papers with number 70.

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Date of creation: 2010
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Handle: RePEc:zbw:faulre:70

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Web page: http://www.arbeitsmarkt.wiso.uni-erlangen.de/english-version/
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Keywords: wage cyclicality; wage bargaining; works council; Germany;

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Cited by:
  1. Schnitzlein, Daniel D., 2012. "How Important Is Cultural Background for the Level of Intergenerational Mobility?," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 335-337.
  2. Brenzel, Hanna & Gartner, Hermann & Schnabel, Claus, 2013. "Wage posting or wage bargaining? Evidence from the employers' side," Discussion Papers 85, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  3. Hirsch, Boris & Zwick, Thomas, 2013. "How selective are real wage cuts? A micro-analysis using linked employer-employee data," Discussion Papers 88, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  4. Addison, John T. & Teixeira, Paulino & Evers, Katalin & Bellmann, Lutz, 2013. "Collective Bargaining and Innovation in Germany: Cooperative Industrial Relations?," IZA Discussion Papers 7871, Institute for the Study of Labor (IZA).
  5. John Addison & Paulino Teixeira & Katalin Evers & Lutz Bellmann, 2014. "Indicative and Updated Estimates of the Collective Bargaining Premium in Germany," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, Wiley Blackwell, vol. 53(1), pages 125-156, 01.
  6. Uwe Jirjahn, 2013. "Der Beitrag der Arbeitsmarktökonomik zur Erforschung von Gewerkschaften und Tarifvertragsbeziehungen in Deutschland," Research Papers in Economics 2013-03, University of Trier, Department of Economics.

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