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

Author

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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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    5. Munch, Jakob R. & Olney, William W., 2024. "Offshoring and the Decline of Unions," IZA Discussion Papers 17116, Institute of Labor Economics (IZA).
    6. 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.

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    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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