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Wage Cyclicality under Different Regimes of Industrial Relations

Author

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  • Gartner, Hermann

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

  • Schank, Thorsten

    () (University of Mainz)

  • Schnabel, Claus

    () (University of Erlangen-Nuremberg)

Abstract

Since there is scant evidence on the role of industrial relations in wage cyclicality, this paper analyzes the effect of collective wage contracts and of works councils on real wage growth. Using linked employer-employee data for western Germany, we find that works councils affect wage growth only in combination with collective bargaining. Wage adjustments to positive and negative economic shocks are not always symmetric. Only under sectoral bargaining there is a (nearly symmetric) reaction to rising and falling unemployment. In contrast, wage growth in establishments without collective bargaining adjusts only to falling unemployment and is unaffected by rising unemployment.

Suggested Citation

  • Gartner, Hermann & Schank, Thorsten & Schnabel, Claus, 2010. "Wage Cyclicality under Different Regimes of Industrial Relations," IZA Discussion Papers 5228, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp5228
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    Citations

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    Cited by:

    1. Brenzel, Hanna & Gartner, Hermann & Schnabel, Claus, 2014. "Wage bargaining or wage posting? Evidence from the employers' side," Labour Economics, Elsevier, vol. 29(C), pages 41-48.
    2. Rycx, Francois & Saks, Yves & Tojerow, Ilan, 2016. "Misalignment of Productivity and Wages across Regions? Evidence from Belgian Matched Panel Data," IZA Discussion Papers 10336, Institute for the Study of Labor (IZA).
    3. Boris Hirsch & Thomas Zwick, 2015. "How Selective Are Real Wage Cuts? A Micro-analysis Using Linked Employer–Employee Data," LABOUR, CEIS, vol. 29(4), pages 327-347, December.
    4. E. Gautier & D. Fougère & S. Roux, 2016. "The Impact of the National Minimum Wage on Industry-Level Wage Bargaining in France," Working papers 587, Banque de France.
    5. John Addison & Paulino Teixeira & Katalin Evers & Lutz Bellmann, 2014. "Indicative and Updated Estimates of the Collective Bargaining Premium in Germany," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 53(1), pages 125-156, January.
    6. Uwe Jirjahn, 2013. "Der Beitrag der Arbeitsmarktökonomik zur Erforschung von Gewerkschaften und Tarifvertragsbeziehungen in Deutschland," Research Papers in Economics 2013-03, University of Trier, Department of Economics.
    7. Oberfichtner, Michael & Schnabel, Claus, 2017. "The German model of industrial relations: (Where) does it still exist?," FAU Discussion Papers in Economics 20/2017, Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics.
    8. Müller, Steffen & Stegmaier, Jens, 2017. "Why is there resistance to works councils in Germany? An economic perspective," IWH Discussion Papers 23/2017, Halle Institute for Economic Research (IWH).
    9. Andrew Snell & Heiko Stuber & Jonathan Thomas, 2018. "Downward Real Wage Rigidity and Equal Treatment Wage Contracts: Theory and Evidence," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 30, pages 265-284, October.
    10. Schnitzlein, Daniel D., 2012. "How important is cultural background for the level of intergenerational mobility?," Economics Letters, Elsevier, vol. 114(3), pages 335-337.
    11. Uwe Jirjahn, 2015. "Research on Trade Unions and Collective Bargaining in Germany: The Contribution of Labor Economics," Research Papers in Economics 2015-10, University of Trier, Department of Economics.
    12. 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).
    13. Hermann Gartner, 2015. "Implicit contracts and industrial relations - Evidence from German employer-employee data," Economics Bulletin, AccessEcon, vol. 35(1), pages 298-304.
    14. Nadia Granato & Anette Haas & Silke Hamann & Annekatrin Niebuhr, 2015. "The Impact Of Skill-Specific Migration On Regional Unemployment Disparities In Germany," Journal of Regional Science, Wiley Blackwell, vol. 55(4), pages 513-539, September.

    More about this item

    Keywords

    wage cyclicality; wage bargaining; works council; Germany;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence

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