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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)

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    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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    File URL: http://www.rcfea.org/RePEc/pdf/wp15-08.pdf
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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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