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Can German Unions Still Cut It?

Author

Listed:
  • John T. Addison

    () (University of South Carolina, Durham University, U.S.A.; IZA Bonn, Germany; The Rimini Centre for Economic Analysis, Italy)

  • Paulino Teixeira

    () (University of Coimbra and GEMF, Portugal; IZA Bonn, Germany)

  • Jens Stephani

    (Institut für Arbeitsmarkt- und Berufsforschung der Bundesagentur für Arbeit, Germany)

  • Lutz Bellmann

    () (Friedrich-Alexander-Universität Erlangen-Nürnberg, Institut für Arbeitsmarkt- und Berufsforschung der Bundesagentur für Arbeit, IZA Bonn, Germany)

Abstract

That trade unionism is in decline is seems to be beyond dispute. More controversial is the implied change in union impact on worker wages. In using a linked employer-employee dataset over an interval of continuing decline in unionism, namely 2000-2010, this paper addresses this very issue. It is found that joining a sectoral agreement always produces higher wages, while exiting a sectoral agreement no longer produces wage losses if the transition is to a firm agreement. Leaving a firm agreement to non-coverage also leads to wage reductions, while joining one from non-coverage seems decreasingly favourable. At the end of the day, there is one constant: although small, the positive union wage gap persists.

Suggested Citation

  • John T. Addison & Paulino Teixeira & Jens Stephani & Lutz Bellmann, 2015. "Can German Unions Still Cut It?," Working Paper series 15-08, Rimini Centre for Economic Analysis.
  • Handle: RePEc:rim:rimwps:15-08
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    References listed on IDEAS

    as
    1. Fitzenberger, Bernd & Kohn, Karsten, 2006. "Gleicher Lohn für gleiche Arbeit? Zum Zusammenhang zwischen Gewerkschaftsmitgliedschaft und Lohnstruktur in Westdeutschland 1985?1997," ZEW Discussion Papers 06-006, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    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. 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.
    4. John T. Addison & Alex Bryson & Paulino Teixeira & André Pahnke & Lutz Bellmann, 2011. "The Demise of a Model? The State of Collective Bargaining and Worker Representation in Germany," GEMF Working Papers 2011-09, GEMF, Faculty of Economics, University of Coimbra.
    5. repec:iab:iabzaf:v:44:i:1/2:p:155-161 is not listed on IDEAS
    6. John Addison & Paulino Teixeira & Katalin Evers & Lutz Bellmann, 2012. "Is the Erosion Thesis Overblown? Evidence from the Orientation of Uncovered Employers," GEMF Working Papers 2012-07, GEMF, Faculty of Economics, University of Coimbra.
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    More about this item

    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

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