IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp8359.html
   My bibliography  Save this paper

Changes in Bargaining Status and Intra-Plant Wage Dispersion in Germany: A Case of (Almost) Plus Ça Change?

Author

Listed:
  • Addison, John T.

    (Durham University Business School)

  • Kölling, Arnd

    (Berlin School of Economics and Law)

  • Teixeira, Paulino

    (University of Coimbra)

Abstract

Recent studies have pointed to the association between declining collective bargaining coverage and rising overall wage inequality. This association holds more or less across-the-board, at least for broad swathes of recent history. That said, the exact contribution of deununionization is a matter of debate, perhaps no more so than in Germany, our case study. The present paper takes a less conventional approach to this particular source of rising inequality by examining intra-plant wage dispersion in the wake of establishments either exiting from or entering into collective agreements. Several measures of inequality are constructed for German establishments over the twelve-year period 1996-2008, an interval of continuously declining union representation. Using linked employer-employee data, our estimation strategy hinges upon the identification of comparable groups of establishments and on both instantaneous and medium- to long-term changes in the wage structure. A modest widening effect on dispersion of exiting from a sectoral agreement is detected in the data once we effect a comparison across observationally-equivalent individuals. The converse does not apply in respect of joiners. The scale of the former effect casts doubt on some of the more exaggerated claims of the importance of deunionization to wage inequality and the resurgence of Germany more generally.

Suggested Citation

  • Addison, John T. & Kölling, Arnd & Teixeira, Paulino, 2014. "Changes in Bargaining Status and Intra-Plant Wage Dispersion in Germany: A Case of (Almost) Plus Ça Change?," IZA Discussion Papers 8359, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp8359
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp8359.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Jonas Pontusson, 2013. "Unionization, Inequality and Redistribution," British Journal of Industrial Relations, London School of Economics, vol. 51(4), pages 797-825, December.
    2. Antonczyk, Dirk & Fitzenberger, Bernd & Sommerfeld, Katrin, 2010. "Rising wage inequality, the decline of collective bargaining, and the gender wage gap," Labour Economics, Elsevier, vol. 17(5), pages 835-847, October.
    3. David Card & Jörg Heining & Patrick Kline, 2013. "Workplace Heterogeneity and the Rise of West German Wage Inequality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(3), pages 967-1015.
    4. DiNardo, John & Fortin, Nicole M & Lemieux, Thomas, 1996. "Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach," Econometrica, Econometric Society, vol. 64(5), pages 1001-1044, September.
    5. Barry T. Hirsch, 2004. "Reconsidering Union Wage Effects: Surveying New Evidence on an Old Topic," Journal of Labor Research, Transaction Publishers, vol. 25(2), pages 233-266, April.
    6. John T. Addison & Ralph W. Bailey & W. Stanley Siebert, 2007. "The Impact of Deunionisation on Earnings Dispersion Revisited," Research in Labor Economics, in: Aspects of Worker Well-Being, pages 337-363, Emerald Group Publishing Limited.
    7. Torres, Sónia & Portugal, Pedro & Addison, John T. & Guimaraes, Paulo, 2013. "The Sources of Wage Variation: A Three-Way High-Dimensional Fixed Effects Regression Model," IZA Discussion Papers 7276, Institute of Labor Economics (IZA).
    8. Rudolf Winter‐Ebmer & Josef Zweimüller, 1999. "Intra‐firm Wage Dispersion and Firm Performance," Kyklos, Wiley Blackwell, vol. 52(4), pages 555-572, November.
    9. John M. Abowd & Francis Kramarz & David N. Margolis, 1999. "High Wage Workers and High Wage Firms," Econometrica, Econometric Society, vol. 67(2), pages 251-334, March.
    10. repec:iab:iabfme:200708(en is not listed on IDEAS
    11. John T. Addison & Paulino Teixeira & Alex Bryson & André Pahnke, 2013. "Collective Agreement Status and Survivability: Change and Persistence in the German Model," LABOUR, CEIS, vol. 27(3), pages 288-309, September.
    12. Alfred Garloff & Nicole Guertzgen, 2012. "Collective Wage Contracts, Opt-Out Clauses, and Firm Wage Differentials: Evidence from Linked Employer–Employee Data," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 51(3), pages 731-748, July.
    13. Gartner, Hermann, 2005. "The imputation of wages above the contribution limit with the German IAB employment sample," FDZ Methodenreport 200502_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    14. repec:iab:iabfda:201001(en is not listed on IDEAS
    15. Jacobebbinghaus, Peter & Seth, Stefan, 2010. "Linked Employer-Employee Data from the IAB : LIAB Cross-sectional Model 2 1993-2008 (LIAB QM2 9308)," FDZ Datenreport. Documentation on Labour Market Data 201005_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    16. Nicole Gürtzgen, 2016. "Estimating the Wage Premium of Collective Wage Contracts: Evidence from Longitudinal Linked Employer–Employee Data," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 55(2), pages 294-322, April.
    17. Christian Dustmann & Johannes Ludsteck & Uta Schönberg, 2009. "Revisiting the German Wage Structure," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(2), pages 843-881.
    18. Karsten Kohn & Alexander C. Lembcke, 2007. "Wage Distributions by Bargaining Regime: Linked Employer-Employee Data Evidence from Germany," CEP Discussion Papers dp0813, Centre for Economic Performance, LSE.
    19. Card, David, 1996. "The Effect of Unions on the Structure of Wages: A Longitudinal Analysis," Econometrica, Econometric Society, vol. 64(4), pages 957-979, July.
    20. Spengler, Anja, 2007. "The establishment history panel," FDZ Methodenreport 200708_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    21. Bernd Fitzenberger & Karsten Kohn & Alexander C. Lembcke, 2013. "Union Density and Varieties of Coverage: The Anatomy of Union Wage Effects in Germany," ILR Review, Cornell University, ILR School, vol. 66(1), pages 169-197, January.
    22. A. D. Roy, 1951. "Some Thoughts On The Distribution Of Earnings," Oxford Economic Papers, Oxford University Press, vol. 3(2), pages 135-146.
    23. 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.
    24. Tobias Brändle, 2017. "Flexible collective bargaining agreements: Still a moderating effect on works council behaviour?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 38(8), pages 1137-1153, December.
    25. repec:iab:iabfme:200502(en is not listed on IDEAS
    26. Christian Dustmann & Bernd Fitzenberger & Uta Sch?nberg & Alexandra Spitz-Oener, 2014. "From Sick Man of Europe to Economic Superstar: Germany's Resurgent Economy," Journal of Economic Perspectives, American Economic Association, vol. 28(1), pages 167-188, Winter.
    27. Gartner, Hermann, 2005. "The imputation of wages above the contribution limit with the German IAB employment sample," FDZ-Methodenreport 200502 (en), Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    28. Karsten Kohn & Alexander Lembcke, 2007. "Wage distributions by bargaining regime," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer;Deutsche Statistische Gesellschaft - German Statistical Society, vol. 1(3), pages 247-261, December.
    29. Gerlach Knut & Stephan Gesine, 2006. "Bargaining Regimes and Wage Dispersion," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 226(6), pages 629-645, December.
    30. Gabriele Fischer & Florian Janik & Dana Müller & Alexandra Schmucker, 2009. "European Data Watch: The IAB Establishment Panel - Things Users Should Know," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 129(1), pages 133-148.
    31. repec:bla:kyklos:v:52:y:1999:i:4:p:555-72 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Andréasson, Hannes, 2014. "The effect of decentralized wage bargaining on the structure of wages and firm performance," Ratio Working Papers 241, The Ratio Institute.
    2. Valeria Cirillo & Matteo Sostero & Federico Tamagni, 2019. "Firm-level pay agreements and within-firm wage inequalities: Evidence across Europe," LEM Papers Series 2019/12, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    3. Fitzenberger Bernd & Sommerfeld Katrin, 2016. "A Sequential Decomposition of the Drop in Collective Bargaining Coverage," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 236(1), pages 37-69, February.
    4. Hinz, Tina, 2016. "Personnel policy adjustments when apprentice positions are unfilled: Evidence from German establishment data," Discussion Papers 99, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    5. Arnd Kölling, 2014. "Labor Demand and Unequal Payment: Does Wage Inequality matter? Analyzing the Influence of Intra-firm Wage Dispersion on Labor Demand with German Employer-Employee Data," Working Paper Series in Economics 326, University of Lüneburg, Institute of Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Brändle, Tobias, 2024. "Unions and Collective Bargaining: The Influence on Wages, Employment and Firm Survival," GLO Discussion Paper Series 1457, Global Labor Organization (GLO).
    2. 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.
    3. Fitzenberger Bernd & Sommerfeld Katrin, 2016. "A Sequential Decomposition of the Drop in Collective Bargaining Coverage," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 236(1), pages 37-69, February.
    4. Antonczyk, Dirk & Fitzenberger, Bernd & Sommerfeld, Katrin, 2010. "Rising wage inequality, the decline of collective bargaining, and the gender wage gap," Labour Economics, Elsevier, vol. 17(5), pages 835-847, October.
    5. Daniel Baumgarten & Gabriel Felbermayr & Sybille Lehwald, 2020. "Dissecting Between‐Plant and Within‐Plant Wage Dispersion: Evidence from Germany," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 59(1), pages 85-122, January.
    6. Ramos, Raul & Sanromá, Esteban & Simón, Hipólito, 2018. "Wage Differentials by Bargaining Regime in Spain (2002-2014): An Analysis Using Matched Employer-Employee Data," IZA Discussion Papers 12013, Institute of Labor Economics (IZA).
    7. 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.
    8. Baumgarten, Daniel & Lehwald, Sybille, 2019. "Trade Exposure and the Decline in Collective Bargaining: Evidence From Germany," Rationality and Competition Discussion Paper Series 165, CRC TRR 190 Rationality and Competition.
    9. 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.
    10. Martin Biewen & Matthias Seckler, 2019. "Unions, Internationalization, Tasks, Firms, and Worker Characteristics: A Detailed Decomposition Analysis of Rising Wage Inequality in Germany," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 17(4), pages 461-498, December.
    11. Andréasson, Hannes, 2014. "The effect of decentralized wage bargaining on the structure of wages and firm performance," Ratio Working Papers 241, The Ratio Institute.
    12. Michael J. Böhm & Hans-Martin von Gaudecker & Felix Schran, 2024. "Occupation Growth, Skill Prices, and Wage Inequality," Journal of Labor Economics, University of Chicago Press, vol. 42(1), pages 201-243.
    13. Koomen, Miriam & Backes-Gellner, Uschi, 2022. "Occupational tasks and wage inequality in West Germany: A decomposition analysis," Labour Economics, Elsevier, vol. 79(C).
    14. John Addison & Paulino Teixeira & Jens Stephani & Lutz Bellmann, 2012. "Can German Unions Still Cut It?," GEMF Working Papers 2012-19, GEMF, Faculty of Economics, University of Coimbra.
    15. Christian Dustmann & Bernd Fitzenberger & Uta Sch?nberg & Alexandra Spitz-Oener, 2014. "From Sick Man of Europe to Economic Superstar: Germany's Resurgent Economy," Journal of Economic Perspectives, American Economic Association, vol. 28(1), pages 167-188, Winter.
    16. Biewen, Martin & Seckler, Matthias, 2017. "Changes in the German Wage Structure: Unions, Internationalization, Tasks, Firms, and Worker Characteristics," IZA Discussion Papers 10763, Institute of Labor Economics (IZA).
    17. Francesco Devicienti & Bernardo Fanfani & Agata Maida, 2019. "Collective Bargaining and the Evolution of Wage Inequality in Italy," British Journal of Industrial Relations, London School of Economics, vol. 57(2), pages 377-407, June.
    18. Gabriel Felbermayr & Andreas Hauptmann & Hans-Jörg Schmerer, 2014. "International Trade and Collective Bargaining Outcomes: Evidence from German Employer–Employee Data," Scandinavian Journal of Economics, Wiley Blackwell, vol. 116(3), pages 820-837, July.
    19. Addison, John T. & Teixeira, Paulino & Stephani, Jens & Bellmann, Lutz, 2014. "Union Decline and the Coverage Wage Gap in Germany," IZA Discussion Papers 8257, Institute of Labor Economics (IZA).
    20. Arnd Kölling, 2014. "Labor Demand and Unequal Payment: Does Wage Inequality matter? Analyzing the Influence of Intra-firm Wage Dispersion on Labor Demand with German Employer-Employee Data," Working Paper Series in Economics 326, University of Lüneburg, Institute of Economics.

    More about this item

    Keywords

    Germany; collective bargaining; deunionization; intra-plant wage inequality; sectoral agreement exits and accessions;
    All these keywords.

    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
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp8359. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.