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Rent-Sharing and Collective Bargaining Coverage: Evidence from Linked Employer-Employee Data

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  • Gürtzgen, Nicole
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    Abstract

    Using a linked employer-employee data set, this paper analyses the relationship between firm-profitability and wages. Particular emphasis is given to the question of whether the sensitivity of wages to firm-specific rents varies with collective bargaining coverage. To address this issue, we distinguish sector- specific wage agreements, firm-specific wage agreements and wage determination without any bargaining coverage. Our findings indicate that individual wages are positively related to firm-specific rents in the non-union sector and under firm-specific contracts. Industry-wide wage contracts, however, seem to suppress firm-level rent-sharing. While pooled OLS estimates yield a positive correlation between wages and quasi-rents under centralised contracts, estimates accounting for unobserved individual and establishment heterogeneity point to a coe? cient of zero. Differenced GMM estimates accounting for the endogeneity of our profitability measure even point to a negative relationship under centralised contracts. --

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    Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 05-90.

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    Date of creation: 2005
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    Handle: RePEc:zbw:zewdip:4573

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    Keywords: Rent-Sharing; Unions; Linked Employer-Employee Data;

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    Cited by:
    1. Claudia M. Buch, 2008. "The Great Risk Shift? Income Volatility in an International Perspective," CESifo Working Paper Series 2465, CESifo Group Munich.
    2. Nicole Gürtzgen, 2006. "The Effect of Firm- ans Industry-Level Contracts on Wages: Evidence from Longitudinal Linked Employer-Employee Data," ZEW Discussion Papers, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research 06-82, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.

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