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Pacts for Employment and Competitiveness as a Role Model? Their Effects on Firm Performance

Author

Listed:
  • John T. Addison

    () (University of South Carolina, Durham University, University of Coimbra/GEMF, and IZA Bonn.)

  • Paulino Teixeira

    () (Faculty of Economics, University of Coimbra/GEMF and IZA Bonn)

  • Katalin Evers

    (Institute for Employment Research (IAB))

  • Lutz Bellmann

    (Friedrich-Alexander-Universität Erlangen-Nürnberg, IAB and IZA Bonn)

Abstract

Pacts for employment and competitiveness are an integral component of the ongoing process of decentralization of collective bargaining in Germany, a phenomenon that has been hailed as key to that nation's economic resurgence. Yet little is known about the effects of pacts on firm performance. The evidence largely pertains to employment and is decidedly mixed. The present paper investigates the association between pacts and a wider set of outcomes – wages, employment, investment, productivity, innovation, and survivability – in a RDD framework where the controls comprise establishments that negotiated over pacts but failed to reach agreement on their implementation. An extensive set of simulations are run to test for robustness of the key findings of the model. There is no evidence of pacts negatively impacting any of the selected measures of establishment performance. Indeed, the positive effects reported for wages, productivity, and innovation are sustained in simulations.

Suggested Citation

  • John T. Addison & Paulino Teixeira & Katalin Evers & Lutz Bellmann, 2015. "Pacts for Employment and Competitiveness as a Role Model? Their Effects on Firm Performance," GEMF Working Papers 2015-18, GEMF, Faculty of Economics, University of Coimbra.
    • Handle: RePEc:gmf:wpaper:2015-18.
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    References listed on IDEAS

    as
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    Cited by:

    1. Devicienti, Francesco & Manello, Alessandro & Vannoni, Davide, 2017. "Technical efficiency, unions and decentralized labor contracts," European Journal of Operational Research, Elsevier, vol. 260(3), pages 1129-1141.
    2. John T. Addison, 2016. "Collective bargaining systems and macroeconomic and microeconomic flexibility: the quest for appropriate institutional forms in advanced economies," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-53, December.
    3. Jelle Visser, 2016. "What happened to collective bargaining during the great recession?," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-35, December.

    More about this item

    Keywords

    pacts for employment and competitiveness; concession bargaining; opening clauses decentralization; firm performance; regression discontinuity design; Germany.;

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence

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