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

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  • Wolfgang Ochel

Abstract

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.

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
    DOI: 10.1111/j.1467-9914.2005.00291.x
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    File URL: https://doi.org/10.1111/j.1467-9914.2005.00291.x
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    Cited by:

    1. 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.
    2. 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.
    3. Rosemary Batt & Hiroatsu Nohara & Hyunji Kwon, 2010. "Employer Strategies and Wages in New Service Activities: A Comparison of Co‐ordinated and Liberal Market Economies," British Journal of Industrial Relations, London School of Economics, vol. 48(2), pages 400-435, June.
    4. 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.
    5. 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.
    6. 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.
    7. de Pinto, Marco & Lingens, Jörg, 2019. "The impact of unionization costs when firm-selection matters," Labour Economics, Elsevier, vol. 60(C), pages 50-63.
    8. Fei Peng & W. Stanley Siebert, 2008. "Real Wage Cyclicality in Italy," LABOUR, CEIS, vol. 22(4), pages 569-591, December.
    9. 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.
    10. John T. Addison & Paulino Teixeira & Katalin Evers & Lutz Bellmann, 2015. "Pacts for Employment and Competitiveness as a Role Model? Their Effects on Firm Performance," GEMF Working Papers 2015-18, GEMF, Faculty of Economics, University of Coimbra.
    11. 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.
    12. 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.
    13. 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.
    14. 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).
    15. Mario Reinhold & Stephan Thomsen, 2017. "The changing situation of labor market entrants in Germany
      [Die veränderliche Situation für Berufseinsteiger in Deutschland]
      ," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 50(1), pages 161-174, August.
    16. WolfgangOchel, 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(04), pages 40-55, January.
    17. Peng, Fei & Siebert, W. Stanley, 2007. "Real Wage Cyclicality in Germany and the UK: New Results Using Panel Data," IZA Discussion Papers 2688, Institute of Labor Economics (IZA).
    18. 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 of Labor Economics (IZA).

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