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Effects of reciprocal concessions on employment and real capital

Author

Listed:
  • Lutz Bellmann

    () (Friedrich-Alexander Universität Erlangen-Nürnberg, Institut für Arbeitsmarkt- und Berufsforschung)

  • Hans-Dieter Gerner

    () (Institut für Arbeitsmarkt- und Berufsforschung)

  • Olaf Hübler

    () (Leibniz Universität Hannover)

Abstract

Using a three-stage least squares estimator, this paper analyzes within a three equation model the effects of company-level pacts involving reciprocal concessions in Germany. We find that such agreements between employers and employees commonly fail to achieve their primary objective to stabilize or to extend the employment but the agreements do result in increased investments relative to the real capital stock. A matching estimator confirms this result. We furthermore distinguish between different collective bargaining regimes. We find that in establishments without any kind of collective bargaining the negative employment and the positive investment effects are stronger than in firms with industry-level bargaining. In firms with company-level bargaining we cannot find significant investment effects. The employment effects are similar to those of industry-level bargaining establishments.

Suggested Citation

  • Lutz Bellmann & Hans-Dieter Gerner & Olaf Hübler, 2014. "Effects of reciprocal concessions on employment and real capital," Economics Bulletin, AccessEcon, vol. 34(1), pages 494-509.
  • Handle: RePEc:ebl:ecbull:eb-13-00060
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    File URL: http://www.accessecon.com/Pubs/EB/2014/Volume34/EB-14-V34-I1-P47.pdf
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    References listed on IDEAS

    as
    1. John Addison & Paulino Teixeira & Katalin Evers & Lutz Bellmann, 2014. "Indicative and Updated Estimates of the Collective Bargaining Premium in Germany," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 53(1), pages 125-156, January.
    2. Gerlach Knut & Stephan Gesine, 2006. "Bargaining Regimes and Wage Dispersion," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 226(6), pages 629-645, December.
    3. Card, David, 2001. "Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems," Econometrica, Econometric Society, vol. 69(5), pages 1127-1160, September.
    4. Nickell, Stephen, 1985. "Error Correction, Partial Adjustment and All That: An Expository Note," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 47(2), pages 119-129, May.
    5. Hübler Olaf, 2005. "Sind betriebliche Bündnisse für Arbeit erfolgreich? / Are ln-plant Alliances for Job Security Successful?," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 225(6), pages 630-652, December.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Uwe Jirjahn, 2015. "Research on Trade Unions and Collective Bargaining in Germany: The Contribution of Labor Economics," Research Papers in Economics 2015-10, University of Trier, Department of Economics.

    More about this item

    Keywords

    Reciprocal concessions; company-level pacts; employment; real capital; investment;

    JEL classification:

    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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