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A Sequential Decomposition of the Drop in Collective Bargaining Coverage

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  • Fitzenberger Bernd

    (School of Business and Economics, Chair of Econometrics, Humboldt-University Berlin, Spandauer Str. 1, 10178 Berlin, Germany)

  • Sommerfeld Katrin

    (Department of Environmental and Resource Economics, Environmental Management, Centre for European Economic Research, ZEW, L7, 1, 68161 Mannheim, Germany)

Abstract

Union representation has been in strong decline in most OECD countries with potentially important consequences for wages. What drives this decline? We try to answer this question by developing and implementing a detailed Fairlie decomposition approach. Using linked employer-employee data from the German Structure of Earnings Survey for 2001 and 2006, we document a sharp drop in collective bargaining coverage that amounts to 17 percentage points for males and 20 percentage points for females in West, and 8 and 14 percentage points, respectively, in East Germany. We find that neither changes in the characteristics nor changes in the coefficients associated with the characteristics as a whole provide an explanation for the drop in collective bargaining coverage. The drop in coverage is the result of an unexplained time trend.

Suggested Citation

  • Fitzenberger Bernd & Sommerfeld Katrin, 2016. "A Sequential Decomposition of the Drop in Collective Bargaining Coverage," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 236(1), pages 37-69, February.
    • Handle: RePEc:jns:jbstat:v:236:y:2016:i:1:p:37-69
    DOI: 10.1515/jbnst-2015-1002
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    More about this item

    Keywords

    collective bargaining; unions; sequential decomposition;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation

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