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Industrial Relations and the Wage Differentials between Skilled and Unskilled Blue-Collar Workers within Establishments: An Empirical Analysis with Data of Manufacturing Firms

Author

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  • Hübler, Olaf

    () (Leibniz University of Hannover)

  • Meyer, Wolfgang

    () (Leibniz University of Hannover)

Abstract

Increased wage inequality between skilled and unskilled workers is a stylized fact, which can be observed in many developed countries. Among the explanations advanced for this phenomenon is the increasing globalization, a skill-biased technical progress, restructuring of the firms, and last but not least, a decreasing importance of industrial relations institutions. In the paper, we investigate in a three-step procedure with firms’ data whether the latter determinant is influential. We control for the other relevant explanations and split industrial relations into three components - coverage of collective bargaining, existence of a works council, and union density - within a four-equation model. We find an insignificant influence of the union density. A Works council compresses the wage differentials between skilled and unskilled blue-collar workers while coverage is effective in the opposite direction. The latter two effects nearly offset each other.

Suggested Citation

  • Hübler, Olaf & Meyer, Wolfgang, 2000. "Industrial Relations and the Wage Differentials between Skilled and Unskilled Blue-Collar Workers within Establishments: An Empirical Analysis with Data of Manufacturing Firms," IZA Discussion Papers 176, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp176
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Goergen, Marc & Manjon, Miguel C. & Renneboog, Luc, 2008. "Recent developments in German corporate governance," International Review of Law and Economics, Elsevier, vol. 28(3), pages 175-193, September.
    2. Uwe Jirjahn, 2011. "Gender, Worker Representation and the Profitability of Firms in Germany," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 8(2), pages 281-298, December.
    3. Uwe Jirjahn, 2010. "Nonunion Worker Representation and the Closure of Establishments: German Evidence on the Role of Moderating Factors," Research Papers in Economics 2010-01, University of Trier, Department of Economics.

    More about this item

    Keywords

    union density; skilled and unskilled labour; Wage differentials; coverage of collective bargaining; works councils;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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