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The German Model of Industrial Relations: (Where) Does It Still Exist?

Author

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  • Oberfichtner, Michael

    () (Institute for Employment Research (IAB), Nuremberg)

  • Schnabel, Claus

    () (University of Erlangen-Nuremberg)

Abstract

Using data from the representative IAB Establishment Panel, this paper charts changes in the two main pillars of the German IR model over the last 20 years. It shows that collective bargaining coverage and worker representation via works councils have substantially fallen outside the public sector. Less formalized and weaker institutions such as voluntary orientation of uncovered firms towards sectoral agreements and alternative forms of employee representation at the workplace have partly attenuated the overall erosion in coverage. Multivariate analyses indicate that the traditional German IR model (with both collective agreements and works council presence) is more likely to be found in larger and older establishments, and it is less likely in establishments managed by the owner, in single and foreign-owned establishments, in individually-owned firms or partnerships, and in exporting establishments. In contrast, more than 60 percent of German establishments did not exhibit bargaining coverage or orientation or any kind of worker representation in 2015. Such a complete absence of the main institutional features of the German IR model is predominantly found in small and medium-sized establishments, in particular in the service sector and in eastern Germany, and its extent is increasing dramatically.

Suggested Citation

  • Oberfichtner, Michael & Schnabel, Claus, 2017. "The German Model of Industrial Relations: (Where) Does It Still Exist?," IZA Discussion Papers 11064, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp11064
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    References listed on IDEAS

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    1. Schroeder, Wolfgang, 2016. "Konfliktpartnerschaft – still alive. Veraenderter Konfliktmodus in der verarbeitenden Industrie (Conflict partnership – still alive. The changed conflict mode in the manufacturing industry)," Industrielle Beziehungen - Zeitschrift fuer Arbeit, Organisation und Management - The German Journal of Industrial Relations, Rainer Hampp Verlag, vol. 23(3), pages 374-392.
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    Cited by:

    1. Mertens, Matthias, 2020. "Labor market power and the distorting effects of international trade," International Journal of Industrial Organization, Elsevier, vol. 68(C).
    2. Clément Brébion, 2020. "The impact of works council membership on wages in Germany: a case of strategic discrimination?," PSE Working Papers halshs-02436686, HAL.
    3. Tobias Brändle & Laszlo Goerke, 2018. "The one constant: a causal effect of collective bargaining on employment growth? Evidence from German linked‐employer‐employee data," Scottish Journal of Political Economy, Scottish Economic Society, vol. 65(5), pages 445-478, November.
    4. Boris Hirsch & Steffen Mueller, 2020. "Firm Wage Premia, Industrial Relations, and Rent Sharing in Germany," ILR Review, Cornell University, ILR School, vol. 73(5), pages 1119-1146, October.
    5. Lochner, Benjamin & Seth, Stefan & Wolter, Stefanie, 2020. "Decomposing the large firm wage premium in Germany," Economics Letters, Elsevier, vol. 194(C).

    More about this item

    Keywords

    collective bargaining; bargaining coverage; works council; worker participation; industrial relations; Germany;

    JEL classification:

    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • 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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