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Can German Unions Still Cut It?

  • 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)

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.

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Paper provided by The Rimini Centre for Economic Analysis in its series Working Paper Series with number 15-08.

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Date of creation: Feb 2015
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Handle: RePEc:rim:rimwps:15-08
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  1. 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].
  2. Dustmann, Christian & Ludsteck, Johannes & Schönberg, Uta, 2007. "Revisiting the German Wage Structure," IZA Discussion Papers 2685, Institute for the Study of Labor (IZA).
  3. Wolf Heinbach, 2007. "Wages in wage-setting regimes with opening clauses," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer;Deutsche Statistische Gesellschaft - German Statistical Society, vol. 1(3), pages 233-245, December.
  4. repec:iab:iabzaf:v:44:i:1/2:p:155-161 is not listed on IDEAS
  5. Haipeter, Thomas & Lehndorff, Steffen, 2009. "Collective bargaining on employment," ILO Working Papers 433128, International Labour Organization.
  6. Bernd Fitzenberger & Karsten Kohn & Alexander C. Lembcke, 2008. "Union Density and Varieties of Coverage: The Anatomy of Union Wage Effects in Germany," CEP Discussion Papers dp0859, Centre for Economic Performance, LSE.
  7. Fitzenberger, Bernd & Kohn, Karsten, 2006. "Gleicher Lohn für gleiche Arbeit? Zum Zusammenhang zwischen Gewerkschaftsmitgliedschaft und Lohnstruktur in Westdeutschland 1985?1997," ZEW Discussion Papers 06-06, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  8. 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 - Faculdade de Economia, Universidade de Coimbra.
  9. Hirsch, Boris & Schnabel, Claus, 2011. "Let's take bargaining models seriously: The decline in union power in Germany, 1992 - 2009," Discussion Papers 73, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  10. Antonczyk, Dirk & Fitzenberger, Bernd & Sommerfeld, Katrin, 2010. "Rising wage inequality, the decline of collective bargaining, and the gender wage gap," ZEW Discussion Papers 10-014, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  11. Gesine Stephan & Knut Gerlach, 2005. "Wage settlements and wage setting: results from a multi-level model," Applied Economics, Taylor & Francis Journals, vol. 37(20), pages 2297-2306.
  12. Anke Hassel, 1999. "The Erosion of the German System of Industrial Relations," British Journal of Industrial Relations, London School of Economics, vol. 37(3), pages 483-505, 09.
  13. Jung, Sven & Schnabel, Claus, 2009. "Paying more than necessary? The wage cushion in Germany," Discussion Papers 63, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  14. Wolf Dieter Heinbach & Markus Spindler, 2007. "To Bind or Not to Bind Collectively? Decomposition of Bargained Wage Differences Using Counterfactual Distributions," IAW Discussion Papers 36, Institut für Angewandte Wirtschaftsforschung (IAW).
  15. Addison, John T. & Schnabel, Claus & Wagner, Joachim, 2006. "The (Parlous) State of German Unions," IZA Discussion Papers 2000, Institute for the Study of Labor (IZA).
  16. José Mata & José A. F. Machado, 2005. "Counterfactual decomposition of changes in wage distributions using quantile regression," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(4), pages 445-465.
  17. 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 - Faculdade de Economia, Universidade de Coimbra.
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