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What can we Learn from Bargaining Models about Union Power? The Decline in Union Power in Germany, 1992–2009

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  • Boris Hirsch
  • Claus Schnabel

Abstract

type="main"> 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 taking account of taxation, unemployment benefits, and the labour market situation and confronts this indicator with annual data for Germany. The results show that union power did not change much from 1992 to 2002 but fell markedly (by about one-third) from 2002 to 2007 in the aftermath of substantial labour market reforms.

Suggested Citation

  • Boris Hirsch & Claus Schnabel, 2014. "What can we Learn from Bargaining Models about Union Power? The Decline in Union Power in Germany, 1992–2009," Manchester School, University of Manchester, vol. 82(3), pages 347-362, June.
  • Handle: RePEc:bla:manchs:v:82:y:2014:i:3:p:347-362
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    Cited by:

    1. Capuano, Stella & Hauptmann, Andreas & Schmerer, Hans-Jörg, 2014. "Trade and unions: Can exporters benefit from collective bargaining?," IAB Discussion Paper 201424, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    2. Stella Capuano & Hans-Jörg Schmerer, 2015. "Trade and Unemployment Revisited: Do Institutions Matter?," The World Economy, Wiley Blackwell, vol. 38(7), pages 1037-1063, July.
    3. Matthias Strifler & Thomas Beissinger, 2016. "Fairness Considerations in Labor Union Wage Setting – A Theoretical Analysis," Scottish Journal of Political Economy, Scottish Economic Society, vol. 63(3), pages 303-330, July.
    4. Hirsch, Boris & Müller, Steffen, 2018. "Firm Wage Premia, Industrial Relations, and Rent Sharing in Germany," IZA Discussion Papers 11309, Institute for the Study of Labor (IZA).
    5. Albrecht Glitz & Daniel Wissmann, 2017. "Skill Premiums and the Supply of Young Workers in Germany," CESifo Working Paper Series 6576, CESifo Group Munich.

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