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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.

Suggested Citation

  • 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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    Cited by:

    1. 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.
    2. 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 for the Study of Labor (IZA).
    3. Tobias Brändle, 2013. "Flexible Collective Bargaining Agreements: Still a Moderating Effect on Works Council Behaviour?," IAW Discussion Papers 96, Institut für Angewandte Wirtschaftsforschung (IAW).
    4. 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.
    5. Addison, John T. & Teixeira, Paulino & Evers, Katalin & Bellmann, Lutz, 2013. "Collective Bargaining and Innovation in Germany: Cooperative Industrial Relations?," IZA Discussion Papers 7871, Institute for the Study of Labor (IZA).
    6. repec:iab:iabzaf:v:44:i:1/2:p:163-172 is not listed on IDEAS
    7. Anita Wölfl & Juan S. Mora-Sanguinetti, 2011. "Reforming the Labour Market in Spain," OECD Economics Department Working Papers 845, OECD Publishing.

    More about this item

    Keywords

    collective bargaining; opening clauses; job flows; propensity score matching;

    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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