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Let's take bargaining models seriously: The decline in union power in Germany, 1992 - 2009

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  • Hirsch, Boris
  • Schnabel, Claus

Abstract

Building on the right-to-manage model of collective bargaining, this paper tries to infer union power from the observed results in wage setting. It derives a time-varying indicator of union strength and confronts it with annual data for Germany. The results show that union power was relatively stable in the 1990s but fell substantially (by almost one-third) from 1999 to 2007. Two-thirds of this fall in union power follow from the reduction in the labour share relative to the capital share whereas changes in the gap between the net wage and the income when unemployed account for the remaining third. -- Dieser Beitrag versucht unter Verwendung des right-to-manage-Modells kollektiver Verhandlungen aus den beobachteten Lohnabschlüssen auf die entsprechende Gewerkschaftsmacht zurückzuschließen. Wir leiten einen zeitvarianten Indikator gewerkschaftlicher Stärke her und berechnen ihn mit Jahresdaten für Deutschland. Die Ergebnisse deuten darauf hin, dass die Gewerkschaftsmacht in den 1990er Jahren relativ stabil war, aber von 1999 bis 2007 deutlich (um fast ein Drittel) zurückging. Zwei Drittel dieses Rückgangs der Gewerkschaftsmacht gehen auf eine Verringerung der Lohnquote relativ zur Kapitaleinkommensquote zurück, während Veränderungen im Abstand zwischen dem Nettolohn und dem Einkommen bei Arbeitslosigkeit für das restliche Drittel verantwortlich sind.

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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 73.

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Date of creation: 2011
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Handle: RePEc:zbw:faulre:73

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Keywords: trade union power; wage bargaining; labour share; Germany;

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References

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  1. Hirsch, Boris & Schnabel, Claus, 2010. "Women Move Differently: Job Separations and Gender," IZA Discussion Papers 5154, Institute for the Study of Labor (IZA).
  2. John Pencavel, 2009. "How Successful Have Trade Unions Been? A Utility-Based Indicator of Union Well-Being," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 62(2), pages 147-156, January.
  3. Mosthaf, Alexander & Schank, Thorsten & Schnabel, Claus, 2009. "Low-wage employment versus unemployment: which one provides better prospects for women?," IWQW Discussion Paper Series 14/2009, Friedrich-Alexander-Universität Erlangen-Nürnberg, Institut für Wirtschaftspolitik und Quantitative Wirtschaftsforschung (IWQW).
  4. Francesca D'Auria & Cécile Denis & Karel Havik & Kieran Mc Morrow & Christophe Planas & Rafal Raciborski & Werner Roger & Alessandro Rossi, 2010. "The production function methodology for calculating potential growth rates and output gaps," European Economy - Economic Papers 420, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
  5. René Fahr & Uwe Sunde, 2009. "Did the Hartz Reforms Speed-Up the Matching Process? A Macro-Evaluation Using Empirical Matching Functions," German Economic Review, Verein für Socialpolitik, vol. 10, pages 284-316, 08.
  6. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173.
  7. Booth,Alison L., 1994. "The Economics of the Trade Union," Cambridge Books, Cambridge University Press, number 9780521468398, October.
  8. Hirsch, Boris & Schnabel, Claus, 2011. "Let's take bargaining models seriously: The decline in union power in Germany, 1992 - 2009," Discussion Papers 73, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  9. McDonald, Ian M & Suen, Anthony, 1992. "On the Measurement and Determination of Trade Union Power," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 54(2), pages 209-24, May.
  10. Arpaia, Alfonso & Pérez, Esther & Pichelmann, Karl, 2009. "Understanding labour income share dynamics in Europe," MPRA Paper 15649, University Library of Munich, Germany.
  11. John T. Addison & Claus Schnabel & Joachim Wagner, 2006. "The (Parlous) State of German Unions," Working Paper Series in Economics 23, University of Lüneburg, Institute of Economics.
  12. Fahr, René & Sunde, Uwe, 2009. "Did the Hartz Reforms Speed-Up the Matching Process? A Macro-Evaluation Using Empirical Matching Functions," Munich Reprints in Economics 20482, University of Munich, Department of Economics.
  13. 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.
  14. A L Booth & M Chatterji, . "Union Membership And Wage Bargaining When Membership Is Not Compulsory," Dundee Discussion Papers in Economics 048, Economic Studies, University of Dundee.
  15. Doiron, Denise J, 1992. "Bargaining Power and Wage-Employment Contracts in a Unionized Industry," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 33(3), pages 583-606, August.
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Cited by:
  1. Hirsch, Boris & Schnabel, Claus, 2011. "Let's Take Bargaining Models Seriously: The Decline in Union Power in Germany, 1992-2009," IZA Discussion Papers 5875, Institute for the Study of Labor (IZA).
  2. Schnabel, Claus, 2012. "Union membership and density: Some (not so) stylized facts and challenges," Discussion Papers 81, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  3. John Addison & Paulino Teixeira & Jens Stephani & Lutz Bellmann, 2012. "Can German Unions Still Cut It?," GEMF Working Papers 2012-19, GEMF - Faculdade de Economia, Universidade de Coimbra.

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