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Is There a Union Wage Premium in Germany and Which Workers Benefit Most?

Author

Listed:
  • Bonaccolto-Töpfer, Marina

    (University of Genova)

  • Schnabel, Claus

    (University of Erlangen-Nuremberg)

Abstract

Using representative data from the German Socio-Economic Panel (SOEP), this paper finds a statistically significant union wage premium in Germany of almost three percent which is not simply a collective bargaining premium. Given that the union membership fee is typically about one percent of workers' gross wages, this finding suggests that it pays off to be a union member. Our results show that the wage premium differs substantially between various occupations and educational groups, but not between men and women. We do not find that union wage premia are higher for those occupations and workers which constitute the core of union membership. Rather, unions seem to care about disadvantaged workers and pursue a wider social agenda.

Suggested Citation

  • Bonaccolto-Töpfer, Marina & Schnabel, Claus, 2023. "Is There a Union Wage Premium in Germany and Which Workers Benefit Most?," IZA Discussion Papers 15844, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp15844
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    Cited by:

    1. Claus Schnabel, 2025. "Unions and employers’ associations in Germany: a survey of their membership, density and bargaining coverage," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 59(1), pages 1-16, December.
    2. Rieder, André & Schnabel, Claus, 2025. "Beyond Collective Agreements: The Rise of the Wage Cushion in Germany," IZA Discussion Papers 18153, Institute of Labor Economics (IZA).
    3. Adrian Chadi & Laszlo Goerke, 2023. "Seeking shelter in times of crisis? unemployment, perceived job insecurity and trade union membership," Economica, London School of Economics and Political Science, vol. 90(359), pages 1041-1088, July.
    4. Theresa Geißler & Laszlo Goerke, 2023. "Educational Mismatch and Labour Market Institutions: The Role of Gender," Working Papers 2023.14, International Network for Economic Research - INFER.
    5. Marco Clemens & Laszlo Goerke, 2025. "Trade Union Membership and Bonus Payments: German Survey Evidence," IAAEU Discussion Papers 202503, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    6. Brändle, Tobias, 2024. "Unions and Collective Bargaining: The Influence on Wages, Employment and Firm Survival," GLO Discussion Paper Series 1457, Global Labor Organization (GLO).
    7. Björn Becker & Laszlo Goerke & Yue Huang, 2024. "Trade Union Membership and Life Satisfaction," IAAEU Discussion Papers 202408, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).

    More about this item

    Keywords

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    JEL classification:

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

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