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The Rise in Orientation at Collective Bargaining Without a Formal Contract

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  • Mario Bossler

Abstract

While firm participation in collective bargaining between unions and employers’ associations has been decreasing in Germany over the last two decades, orientation at collectively bargained wages has increased in popularity. Orientation implies that employers claim to set wages according to collective agreements but they are not formally bound by the respective bargaining contract, and in fact, I observe that they pay significantly lower wages than firms that are formally covered. Dynamic nonlinear panel estimation applied to establishment‐level data shows that this orientation is a stepping stone into formal participation. However, the decline in formal participation and the opposing rise in orientation are mostly due to a changing establishment composition rather than to behavioral transitions.

Suggested Citation

  • Mario Bossler, 2019. "The Rise in Orientation at Collective Bargaining Without a Formal Contract," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 58(1), pages 17-45, January.
    • Handle: RePEc:bla:indres:v:58:y:2019:i:1:p:17-45
    DOI: 10.1111/irel.12226
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    Cited by:

    1. Mohrenweiser, Jens, 2022. "Works Councils," GLO Discussion Paper Series 1103, Global Labor Organization (GLO).
    2. Claus Schnabel, 2025. "Unions and employers’ associations in Germany: a survey of their membership, density and bargaining coverage," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 59(1), pages 1-16, December.
    3. Brändle, Tobias, 2024. "Unions and Collective Bargaining: The Influence on Wages, Employment and Firm Survival," GLO Discussion Paper Series 1457, Global Labor Organization (GLO).
    4. Lübker, Malte & Schulten, Thorsten, 2021. "Tarifbindung in den Bundesländern: Entwicklungslinien und Auswirkungen auf die Beschäftigten. 3., aktualisierte Auflage," Analysen zur Tarifpolitik 89, The Institute of Economic and Social Research (WSI), Hans Böckler Foundation.
    5. Lübker, Malte & Schulten, Thorsten, 2020. "Tarifbindung in den Bundesländern: Entwicklungslinien und Auswirkungen auf die Beschäftigten. 2., aktualisierte Auflage," Analysen zur Tarifpolitik 87, The Institute of Economic and Social Research (WSI), Hans Böckler Foundation.
    6. Martin Behrens & Andreas Pekarek, 2023. "Delivering the goods? German industrial relations institutions during the COVID‐19 crisis," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 62(2), pages 126-144, April.
    7. Lübker, Malte & Schulten, Thorsten, 2022. "Tarifbindung in den Bundesländern: Entwicklungslinien und Auswirkungen auf die Beschäftigten. 4., aktualisierte Auflage," Analysen zur Tarifpolitik 90, The Institute of Economic and Social Research (WSI), Hans Böckler Foundation.
    8. Mohrenweiser, Jens & Pfeifer, Christian, 2024. "Organisational justice, employee representation, and firm performance," GLO Discussion Paper Series 1499, Global Labor Organization (GLO).
    9. Susan HAYTER & Jelle VISSER, 2021. "Making collective bargaining more inclusive: The role of extension," International Labour Review, International Labour Organization, vol. 160(2), pages 169-195, June.
    10. Schröder, Doris & Lübker, Malte & Schulten, Thorsten, 2021. "Tarifverträge und Tarifflucht in Mecklenburg-Vorpommern," WSI Studies 25, The Institute of Economic and Social Research (WSI), Hans Böckler Foundation.

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