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Pacts for Employment and Competitiveness as a Role Model? Their Effects on Firm Performance

Author

Listed:
  • Addison, John T.

    () (University of South Carolina)

  • Teixeira, Paulino

    () (University of Coimbra)

  • Evers, Katalin

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

  • Bellmann, Lutz

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

Abstract

Pacts for employment and competitiveness are an integral component of the ongoing process of decentralization of collective bargaining in Germany, a phenomenon that has been hailed as key to that nation's economic resurgence. Yet little is known about the effects of pacts on firm performance. The evidence largely pertains to employment and is decidedly mixed. The present paper investigates the association between pacts and a wider set of outcomes – wages, employment, investment, productivity, innovation, and survivability – in a RDD framework where the controls comprise establishments that negotiated over pacts but failed to reach agreement on their implementation. An extensive set of simulations are run to test for robustness of the key findings of the model. There is no evidence of pacts negatively impacting any of the selected measures of establishment performance. Indeed, the positive effects reported for wages, productivity, and innovation are sustained in simulations.

Suggested Citation

  • Addison, John T. & Teixeira, Paulino & Evers, Katalin & Bellmann, Lutz, 2015. "Pacts for Employment and Competitiveness as a Role Model? Their Effects on Firm Performance," IZA Discussion Papers 9323, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp9323
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    References listed on IDEAS

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    2. Nicolas Bacon & Peter Samuel, 2009. "Partnership agreement adoption and survival in the British private and public sectors," Work, Employment & Society, British Sociological Association, vol. 23(2), pages 231-248, June.
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    4. Brändle Tobias & Heinbach Wolf Dieter, 2013. "Opening Clauses in Collective Bargaining Agreements: More Flexibility to Save Jobs?," Review of Economics, De Gruyter, vol. 64(2), pages 159-192, August.
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    Cited by:

    1. Devicienti, Francesco & Manello, Alessandro & Vannoni, Davide, 2017. "Technical efficiency, unions and decentralized labor contracts," European Journal of Operational Research, Elsevier, vol. 260(3), pages 1129-1141.
    2. 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.
    3. Jelle Visser, 2016. "What happened to collective bargaining during the great recession?," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-35, December.

    More about this item

    Keywords

    pacts for employment and competitiveness; opening clauses decentralization; concession bargaining; firm performance; regression discontinuity design; Germany;

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence

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