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Does institutional diversity account for pay rules in Germany and Belgium?

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  • Stephan Kampelmann
  • François Rycx

Abstract

This paper examines the relationship between institutions and the remuneration of different jobs by comparing the German and Belgian labour markets with respect to a typology of institutions (social representations, norms, conventions, legislation, and organisations). The observed institutional differences between the two countries lead to the hypotheses of (I) higher overall pay inequality in Germany; (II) higher pay inequalities between employees and workers in Belgium; and (III) higher (lower) impact of educational credentials (work-post tenure) on earnings in Germany. We provide survey-based empirical evidence supporting hypotheses I and III, but find no evidence for hypothesis II. These results underline the importance of institutional details: although Germany and Belgium belong to the same "variety of capitalism", we provide evidence that small institutional disparities within Continental-European capitalism account for distinct structures of pay.

Suggested Citation

  • Stephan Kampelmann & François Rycx, 2011. "Does institutional diversity account for pay rules in Germany and Belgium?," DULBEA Working Papers 11-12, ULB -- Universite Libre de Bruxelles.
  • Handle: RePEc:dul:wpaper:2013/98327
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    Cited by:

    1. François Rycx & Stephan Kampelmann, 2013. "Who Earns Minimum Wages in Europe? New Evidence Based on Household Surveys," DULBEA Working Papers 13-01, ULB -- Universite Libre de Bruxelles.
    2. Stephan Kampelmann & François Rycx & Yves Saks & Ilan Tojerow, 2018. "Does education raise productivity and wages equally? The moderating role of age and gender," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-37, December.
    3. Nicola Gagliardi & Elena Grinza & François Rycx, 2021. "Can You Teach an Old Dog New Tricks? New Evidence on the Impact of Tenure on Productivity," Working Papers CEB 21-007, ULB -- Universite Libre de Bruxelles.

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    More about this item

    Keywords

    Labour productivity; wages; occupations; production function; matched employer-employ;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • 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
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence

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