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Decentralizing Wage Bargaining in Germany - A Way to Increase Employment?

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  • Wolfgang Ochel

Abstract

The area-wide wage agreement is at the centre of Germany's system of collective bargaining. In recent years, however, there has been a tendency towards the decentralization of collective bargaining. Individual wage agreements have led to more moderate wage developments, whilst collective agreements with individual firms, and agreements at the production unit level, have not had this moderating effect. On the other hand, collective bargaining has become more flexible, leading to greater pay differentiation. The further decentralization of collective bargaining, although desirable, has given rise to objections based in constitutional law and to resistance from employees and employers. Copyright 2005 CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd.

Suggested Citation

  • Wolfgang Ochel, 2005. "Decentralizing Wage Bargaining in Germany - A Way to Increase Employment?," LABOUR, CEIS, vol. 19(1), pages 91-121, March.
  • Handle: RePEc:bla:labour:v:19:y:2005:i:1:p:91-121
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    1. Kevin Reilly & Tony Wirjanto, 1999. "Does More Mean Less? The Male/Female Wage Gap and the Proportion of Females at the Establishment Level," Canadian Journal of Economics, Canadian Economics Association, vol. 32(4), pages 906-929, August.
    2. Macpherson, David A & Hirsch, Barry T, 1995. "Wages and Gender Composition: Why Do Women's Jobs Pay Less?," Journal of Labor Economics, University of Chicago Press, vol. 13(3), pages 426-471, July.
    3. Erica L. Groshen, 1991. "The Structure of the Female/Male Wage Differential: Is It Who You Are, What You Do, or Where You Work?," Journal of Human Resources, University of Wisconsin Press, vol. 26(3), pages 457-472.
    4. Gupta, N.D. & Oaxaca, R.L. & Smith, N., 1998. "Wage Dispersion, Public Sector Wages and the Stagnating Danish Gender Wage Gap," Papers 98-18, Centre for Labour Market and Social Research, Danmark-.
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    Cited by:

    1. John T. Addison & Alex Bryson & Paulino Teixeira & André Pahnke & Lutz Bellmann, 2011. "The Demise of a Model? The State of Collective Bargaining and Worker Representation in Germany," GEMF Working Papers 2011-09, GEMF, Faculty of Economics, University of Coimbra.
    2. Reinhold, Mario & Thomsen, Stephan, 2015. "Patterns of Labour Market Entry of High-Skilled Workers in Germany," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113018, Verein für Socialpolitik / German Economic Association.
    3. John T. Addison & Alex Bryson & Paulino Teixeira & André Pahnke & Lutz Bellmann, 2013. "The Extent of Collective Bargaining and Workplace Representation: Transitions between States and their Determinants. A Comparative Analysis of Germany and Great Britain," Scottish Journal of Political Economy, Scottish Economic Society, vol. 60(2), pages 182-209, May.
    4. Addison, John T. & Teixeira, Paulino & Evers, Katalin & Bellmann, Lutz, 2015. "Pacts for Employment and Competitiveness as a Role Model? Their Effects on Firm Performance," IZA Discussion Papers 9323, Institute for the Study of Labor (IZA).
    5. Wolfgang Ochel, 2005. "Concepts and Measurement of Labour Market Institutions," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 3(4), pages 40-55, 01.
    6. repec:spr:jlabrs:v:50:y:2017:i:1:d:10.1007_s12651-017-0227-3 is not listed on IDEAS
    7. Reinhold, Mario & Thomsen, Stephan L., 2016. "The Changing Situation of Labor Market Entrants in Germany: A Long-Run Analysis of Wages and Occupational Patterns," IZA Discussion Papers 10334, Institute for the Study of Labor (IZA).
    8. Nicole Guertzgen, 2009. "Rent-sharing and Collective Bargaining Coverage: Evidence from Linked Employer-Employee Data," Scandinavian Journal of Economics, Wiley Blackwell, vol. 111(2), pages 323-349, June.
    9. Hamzeh Arabzadeh, 2016. "The political economy of twin deficits and wage setting centralization," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2016017, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    10. Peng, Fei & Siebert, W. Stanley, 2007. "Real Wage Cyclicality in Germany and the UK: New Results Using Panel Data," IZA Discussion Papers 2688, Institute for the Study of Labor (IZA).
    11. John T. Addison, 2016. "Collective bargaining systems and macroeconomic and microeconomic flexibility: the quest for appropriate institutional forms in advanced economies," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-53, December.
    12. John Addison & Paulino Teixeira & Katalin Evers & Lutz Bellmann, 2012. "Is the Erosion Thesis Overblown? Evidence from the Orientation of Uncovered Employers," GEMF Working Papers 2012-07, GEMF, Faculty of Economics, University of Coimbra.
    13. Pia Rattenhuber, 2012. "Marginal Taxes: A Good or a Bad for Wages?: The Incidence of the Structure of Income and Labor Taxes on Wages," Discussion Papers of DIW Berlin 1193, DIW Berlin, German Institute for Economic Research.
    14. Fei Peng & W. Stanley Siebert, 2008. "Real Wage Cyclicality in Italy," LABOUR, CEIS, vol. 22(4), pages 569-591, December.
    15. Zohal Hessami & Thushyanthan Baskaran, 2015. "Has Globalisation Affected Collective Bargaining? An Empirical Test, 1980–2009," The World Economy, Wiley Blackwell, vol. 38(12), pages 1880-1911, December.

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