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Effects of reciprocal concessions on employment and real capital

  • 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)

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.

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File URL: http://www.accessecon.com/Pubs/EB/2014/Volume34/EB-14-V34-I1-P47.pdf
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Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 34 (2014)
Issue (Month): 1 ()
Pages: 494-509

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Handle: RePEc:ebl:ecbull:eb-13-00060
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  1. Linda A. Bell, 1995. "Union wage concessions in the 1980s: The importance of firm-specific factors," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 48(2), pages 258-275, January.
  2. Card, David, 2001. "Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems," Econometrica, Econometric Society, vol. 69(5), pages 1127-60, September.
  3. Olaf Huebler, 2005. "Sind betriebliche Bündnisse für Arbeit erfolgreich?," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 225(6), pages 630-652, November.
  4. Addison, John T. & Teixeira, Paulino & Evers, Katalin & Bellmann, Lutz, 2013. "Indicative and Updated Estimates of the Collective Bargaining Premium in Germany," IZA Discussion Papers 7474, Institute for the Study of Labor (IZA).
  5. 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 119-29, May.
  6. Knut Gerlach & Gesine Stephan, 2006. "Bargaining Regimes and Wage Dispersion," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 226(6), pages 629-645, November.
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