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Opening Clauses in Cellective Bargaining Agreements: More Flexibility to Save Jobs?

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Abstract

Collective bargaining agreements have been said to decrease deployment since the work of Calmfors and Driffill (1988). We investigate empirically whether opening clauses, flexible elements that have been introduced to reduce the decline in coverage, can indeed minimise this effect and increase job growth in covered firms. Using representative data on German establishments, the IAB Establishment Panel, in combination with data on opening clauses from the IAW, and performing propensity score matching to control for selectivity bias, we find that the existence of opening clauses has significantly negative effects on job destruction rates and that it increases job growth by approximately 0.73% per year. However, it does not seem the case that firms with explicit knowledge of opening clauses anticipate their increased flexibility, since they do not have higher job creation rates. As regards the actual application of opening clauses, our results do not show additional effects.

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  • Tobias Brändle & Wolf Dieter Heinbach, 2010. "Opening Clauses in Cellective Bargaining Agreements: More Flexibility to Save Jobs?," IAW Discussion Papers 67, Institut für Angewandte Wirtschaftsforschung (IAW).
  • Handle: RePEc:iaw:iawdip:67
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    1. Eppinger, Peter S., 2019. "Service offshoring and firm employment," Journal of International Economics, Elsevier, vol. 117(C), pages 209-228.
    2. John T. Addison & Alex Bryson & Paulino Teixeira & André Pahnke & Lutz Bellmann, 2011. "The Demise of a Model? The State of Collective Bargaining and Worker Representation in Germany," GEMF Working Papers 2011-09, GEMF, Faculty of Economics, University of Coimbra.
    3. 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.
    4. Kerndler, Martin, 2019. "Size and persistence matter: Wage and employment insurance at the micro level," ECON WPS - Working Papers in Economic Theory and Policy 04/2019, TU Wien, Institute of Statistics and Mathematical Methods in Economics, Economics Research Unit.
    5. Valeria Cirillo & Matteo Sostero & Federico Tamagni, 2019. "Firm-level pay agreements and within-firm wage inequalities: Evidence across Europe," LEM Papers Series 2019/12, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    6. Brändle, Tobias & Heinbach, Wolf Dieter & Maier, Michael F., 2011. "Tarifliche Öffnung in Deutschland: Ausmaß, Determinanten, Auswirkungen (Flexibilisation in the German system of wage bargaining: extent, determinants, impacts)," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 44(1/2), pages 163-172.
    7. Addison, John T. & Teixeira, Paulino & Evers, Katalin & Bellmann, Lutz, 2015. "Pacts for Employment and Competitiveness as a Role Model? Their Effects on Firm Performance," IZA Discussion Papers 9323, Institute of Labor Economics (IZA).
    8. Mirella Damiani & Fabrizio Pompei & Andrea Ricci, 2020. "Opting Out, Collective Contracts and Labour Flexibility: Firm‐Level Evidence for The Italian Case," British Journal of Industrial Relations, London School of Economics, vol. 58(3), pages 558-586, September.
    9. Bachmann, Ronald & Bonin, Holger & Boockmann, Bernhard & Demir, Gökay & Felder, Rahel & Isphording, Ingo E. & Kalweit, René & Laub, Natalie & Vonnahme, Christina & Zimpelmann, Christian, 2020. "Auswirkungen des gesetzlichen Mindestlohns auf Löhne und Arbeitszeiten," IZA Research Reports 96, Institute of Labor Economics (IZA).
    10. Tobias Brändle, 2013. "Flexible Collective Bargaining Agreements: Still a Moderating Effect on Works Council Behaviour?," IAW Discussion Papers 96, Institut für Angewandte Wirtschaftsforschung (IAW).
    11. Capuano, Stella & Hauptmann, Andreas & Schmerer, Hans-Jörg, 2020. "Trade and unions: Does size matter?," Economic Modelling, Elsevier, vol. 84(C), pages 66-75.
    12. Anita Wölfl & Juan S. Mora-Sanguinetti, 2011. "Reforming the Labour Market in Spain," OECD Economics Department Working Papers 845, OECD Publishing.
    13. Markus Leibrecht & Silvia Rocha-Akis, 2014. "Sozialpartnerschaft und makroökonomische Performance," WIFO Monatsberichte (monthly reports), WIFO, vol. 87(8), pages 555-567, August.
    14. Bachmann, Ronald & Bonin, Holger & Boockmann, Bernhard & Demir, Gökay & Felder, Rahel & Isphording, Ingo & Kalweit, René & Laub, Natalie & Vonnahme, Christina & Zimpelmann, Christian, 2020. "Auswirkungen des gesetzlichen Mindestlohns auf Löhne und Arbeitszeiten: Studie im Auftrag der Mindestlohnkommission," RWI Projektberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, number 222998, November.
    15. Addison, John T. & Teixeira, Paulino & Evers, Katalin & Bellmann, Lutz, 2013. "Collective Bargaining and Innovation in Germany: Cooperative Industrial Relations?," IZA Discussion Papers 7871, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    collective bargaining; opening clauses; job flows; propensity score matching;
    All these keywords.

    JEL classification:

    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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