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Changes in Bargaining Status and Intra-Plant Wage Dispersion in Germany. Much Ado about Nothing?

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Listed:
  • Addison, John T.
  • Teixeira, Paulino
  • Evers, Katalin
  • Kölling, Arnd

Abstract

A number of studies have reported that union decline is associated with rising overall wage inequality, not least in Germany where the phenomenon has been linked to economic resurgence. The present paper takes an unconventional approach to this potential source of rising inequality by examining intra-plant wage dispersion in the wake of establishments exiting from or entering into collective bargaining. Our estimation strategy hinges upon the identification of comparable groups of establishments and on both short-run and medium- to long-term changes in the wage structure. Using two main empirical strategies, we report at most a modest widening effect on dispersion for plants abandoning collective agreements. The converse does not apply for those establishments joining collective agreements. These two effects cast doubt on some of the more exaggerated claims as to the importance of deunionization to wage inequality.

Suggested Citation

  • Addison, John T. & Teixeira, Paulino & Evers, Katalin & Kölling, Arnd, 2017. "Changes in Bargaining Status and Intra-Plant Wage Dispersion in Germany. Much Ado about Nothing?," GLO Discussion Paper Series 24, Global Labor Organization (GLO).
  • Handle: RePEc:zbw:glodps:24
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    References listed on IDEAS

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    Cited by:

    1. Kauhanen, Antti & Maczulskij, Terhi & Riukula, Krista, 2020. "Heterogeneous Impacts of the Decentralization of Collective Bargaining," IZA Discussion Papers 13867, Institute of Labor Economics (IZA).
    2. Kauhanen, Antti, 2023. "The Effects of the Decentralization of Collective Bargaining on Wages and Wage Dispersion: Evidence from the Finnish Forest and IT Industries," ETLA Working Papers 105, The Research Institute of the Finnish Economy.

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    More about this item

    Keywords

    Germany; sectoral collective bargaining; deunionization; intra-plant wage inequality; changes in bargaining status;
    All these keywords.

    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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