IDEAS home Printed from https://ideas.repec.org/p/zbw/ubwwpe/20172.html
   My bibliography  Save this paper

Reward effects and incentive effects on the labor market: Empirical evidence for European countries

Author

Listed:
  • Sell, Friedrich L.
  • Öllinger, Michael

Abstract

In this investigation, a political economy model of the labor market is proposed, where unions offer their (old and new) affiliates the combinations between the average real wage level and the standard deviation of wages or salaries. Globalization and other forces, however, have made it recently more difficult to the unions to pursue their policy in the backdrop of a declining union density. This has been established empirically for selected European countries. In an econometric exercise, we have also tested directly the impact of changes in real wages, minimum wage rate, and the effect of 90 to 10 decile ratio on the change in the degree of affiliation, which the unions were able to achieve in the recent past.

Suggested Citation

  • Sell, Friedrich L. & Öllinger, Michael, 2017. "Reward effects and incentive effects on the labor market: Empirical evidence for European countries," Working Papers in Economics 2017,2, Bundeswehr University Munich, Economic Research Group.
    • Handle: RePEc:zbw:ubwwpe:20172
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/167669/1/895919532.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jonas Pontusson, 2013. "Unionization, Inequality and Redistribution," British Journal of Industrial Relations, London School of Economics, vol. 51(4), pages 797-825, December.
    2. Schnabel, Claus, 2012. "Union membership and density: Some (not so) stylized facts and challenges," Discussion Papers 81, Friedrich-Alexander University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
    3. Friedrich L. Sell, 2015. "The New Economics of Income Distribution," Books, Edward Elgar Publishing, number 15663.
    4. David Fairris, 2003. "Unions and Wage Inequality in Mexico," ILR Review, Cornell University, ILR School, vol. 56(3), pages 481-497, April.
    5. Lemieux, Thomas, 1998. "Estimating the Effects of Unions on Wage Inequality in a Panel Data Model with Comparative Advantage and Nonrandom Selection," Journal of Labor Economics, University of Chicago Press, vol. 16(2), pages 261-291, April.
    6. Filip Abraham & Jozef Konings & Stijn Vanormelingen, 2009. "The effect of globalization on union bargaining and price-cost margins of firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 145(1), pages 13-36, April.
    7. William D. Nordhaus, 1975. "The Political Business Cycle," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 42(2), pages 169-190.
    8. Booth, Alison L, 1984. "A Public Choice Model of Trade Union Behaviour and Membership," Economic Journal, Royal Economic Society, vol. 94(376), pages 883-898, December.
    9. David Card, 2001. "The Effect of Unions on Wage Inequality in the U.S. Labor Market," ILR Review, Cornell University, ILR School, vol. 54(2), pages 296-315, January.
    10. Bell, Brian D & Pitt, Michael K, 1998. "Trade Union Decline and the Distribution of Wages in the UK: Evidence from Kernel Density Estimation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 60(4), pages 509-528, November.
    11. Brian D. Bell & Michael K. Pitt, 1998. "Trade Union Decline and the Distribution of Wages in the UK: Evidence from Kernel Density Estimation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 60(4), pages 509-528, November.
    12. Stennek, Johan, 2015. "Why Unions Reduce Wage Inequality, II: The Relation between Solidarity and Unity," Working Papers in Economics 625, University of Gothenburg, Department of Economics.
    13. John Kelly, 2015. "Trade union membership and power in comparative perspective," The Economic and Labour Relations Review, , vol. 26(4), pages 526-544, December.
    14. Bell, Brian D & Pitt, Michael K, 1998. "Trade Union Decline and the Distribution of Wages in the UK: Evidence from Kernel Density Estimation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 60(4), pages 509-528, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Michael Ollinger & Friedrich L. Sell, 2017. "What Determines Union Density? A Political Economy Model of the Labor Market with Empirical Evidence in the Context of European Countries," Review of Economics & Finance, Better Advances Press, Canada, vol. 10, pages 18-32, November.
    2. Töngür, Ünal & Elveren, Adem Yavuz, 2014. "Deunionization and pay inequality in OECD Countries: A panel Granger causality approach," Economic Modelling, Elsevier, vol. 38(C), pages 417-425.
    3. Susan Hayter, 2015. "Unions and collective bargaining," Chapters, in: Janine Berg (ed.), Labour Markets, Institutions and Inequality, chapter 4, pages 95-122, Edward Elgar Publishing.
    4. Susan Hayter & Bradley Weinberg, 2011. "Mind the Gap: Collective Bargaining and Wage Inequality," Chapters, in: Susan Hayter (ed.), The Role of Collective Bargaining in the Global Economy, chapter 6, Edward Elgar Publishing.
    5. Donna Brown & Peter Ingram & Jonathan Wadsworth, 2004. "Everyone's A Winner? Union Effects on Persistence in Private Sector Wage Settlements: Longitudinal Evidence from Britain," School of Economics Discussion Papers 1104, School of Economics, University of Surrey.
    6. John T. Addison & Ralph W. Bailey & W. Stanley Siebert, 2009. "Wage Dispersion in a Partially Unionized Labor Force," GEMF Working Papers 2009-09, GEMF, Faculty of Economics, University of Coimbra.
    7. 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).
    8. John T. Addison & Ralph W. Bailey & W. Stanley Siebert, 2007. "The Impact of Deunionisation on Earnings Dispersion Revisited," Research in Labor Economics, in: Aspects of Worker Well-Being, pages 337-363, Emerald Group Publishing Limited.
    9. Holmes, Craig & Mayhew, Ken, 2015. "Have UK Earnings Distributions Polarised?," INET Oxford Working Papers 2015-02, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    10. Alana Gilbert & Euan Phimister & Ioannis Theodossiou, 2003. "Low Pay and Income in Urban and Rural Areas: Evidence from the British Household Panel Survey," Urban Studies, Urban Studies Journal Limited, vol. 40(7), pages 1207-1222, June.
    11. Walsh, Frank & Strobl, Eric, 2009. "Recent Trends in Trade Union Membership in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 40(1), pages 117-138.
    12. Pischke, Jorn-Steffen & Dinardo, John & Hallock, Kevin F, 2000. "Unions And The Labour Market For Managers," CEPR Discussion Papers 2418, C.E.P.R. Discussion Papers.
    13. Busso, Matias & DiNardo, John & McCrary, Justin, 2009. "New Evidence on the Finite Sample Properties of Propensity Score Matching and Reweighting Estimators," IZA Discussion Papers 3998, Institute of Labor Economics (IZA).
    14. Kharoufeh, Jeffrey P. & Goulias, Konstadinos G., 2002. "Nonparametric identification of daily activity durations using kernel density estimators," Transportation Research Part B: Methodological, Elsevier, vol. 36(1), pages 59-82, January.
    15. David Johnston & Wang-Sheng Lee, 2011. "Explaining the Female Black-White Obesity Gap: A Decomposition Analysis of Proximal Causes," Demography, Springer;Population Association of America (PAA), vol. 48(4), pages 1429-1450, November.
    16. Fei Peng & Lili Kang, 2013. "Labor Market Institutions and Skill Premiums: An Empirical Analysis on the UK, 1972-2002," Journal of Economic Issues, Taylor & Francis Journals, vol. 47(4), pages 959-982.
    17. A Charlwood & K Hansen & David Metcalf, 2000. "Unions and the Sword of Justice: Unions and Pay Systems, Pay Inequality, Pay Discrimination and Low Pay," CEP Discussion Papers dp0452, Centre for Economic Performance, LSE.
    18. Gosling, Amanda, 2003. "The Changing Distribution of Male and Female Wages, 1978-2000: Can the Simple Skills Story be Rejected?," CEPR Discussion Papers 4045, C.E.P.R. Discussion Papers.
    19. Metcalf, David & Hansen, Kirstine & Charlwood, Andy, 2000. "Unions and the sword of justice: unions and pay systems, pay inequality, pay discrimination and low pay," LSE Research Online Documents on Economics 20195, London School of Economics and Political Science, LSE Library.
    20. Pannenberg, Markus & Wagner, Gert G., 2001. "Why Do Overtime Work, Overtime Compensation and the Distribution of Economic Well-Being Evidence for the West Germany and Great Britain," IZA Discussion Papers 318, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    political Economy of the labor market; union density; wage dispersion; average and minimum wages;
    All these keywords.

    JEL classification:

    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:ubwwpe:20172. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/ivbwmde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.