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Trade Exposure and the Decline in Collective Bargaining: Evidence From Germany

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  • Baumgarten, Daniel

    (LMU)

  • Lehwald, Sybille

    (Federal Ministry for Economic Affairs and Energy)

Abstract

We analyze the effect of the increase in trade exposure induced by the rise of China and the transformation of Eastern Europe on collective bargaining coverage of German plants in the period 1996-2008. We exploit cross-industry variation in trade exposure and use trade flows of other high-income countries as instruments for German trade exposure. We find that increased import exposure has led to an increase in the probability of German plants leaving industry-wide bargaining agreements, accounting for about one fifth of the overall decline in the German manufacturing sector. The effect is most pronounced for small and medium-sized plants.

Suggested Citation

  • 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.
  • Handle: RePEc:rco:dpaper:165
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    Cited by:

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    2. Michael J. Böhm & Hans-Martin von Gaudecker & Felix Schran, 2019. "Occupation Growth, Skill Prices, and Wage Inequality," CRC TR 224 Discussion Paper Series crctr224_2019_129, University of Bonn and University of Mannheim, Germany.
    3. Ornelas, Emanuel & Ogeda, Pedro & Soares, Rodrigo, 2021. "Labor Unions and the Electoral Consequences of Trade Liberalization," CEPR Discussion Papers 16721, C.E.P.R. Discussion Papers.
    4. 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.
    5. Christian Dustmann, 2021. "Trade, Labor Markets, and the China Shock: What Can Be Learned from the German Experience?," RF Berlin - CReAM Discussion Paper Series 2112, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).

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    More about this item

    Keywords

    international trade; import competition; collective bargaining;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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