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Firm wage premia, industrial relations,and rent sharing in Germany
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Firm wage premia, industrial relations,and rent sharing in Germany

Author

Listed:
  • Boris Hirsch

    (Leuphana University Lueneburg, Germany)

  • Steffen Mueller

    (Halle Institute for Economic Research (IWH) and University of Magdeburg, Germany)

Abstract

This paper investigates the influence of industrial relations on firm wage premia in Germany. OLS regressions for the firm effects from a two-way fixed effects decomposition of workers’ wages by Card, Heining, and Kline (2013) document that average premia are larger in firms bound by collective agreements and in firms with a works council, holding constant firm performance. RIF regressions show that premia are less dispersed among covered firms but more dispersed among firms with a works council. Hence, deunionization is the only among the suspects investigated that contributes to explaining the marked rise in the premia dispersion over time.

Suggested Citation

  • Boris Hirsch & Steffen Mueller, 2018. "Firm wage premia, industrial relations,and rent sharing in Germany," Working Paper Series in Economics 380, University of Lüneburg, Institute of Economics.
    • Handle: RePEc:lue:wpaper:380
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    Cited by:

    1. Winkler, Erwin, 2020. "Diverging paths: Labor reallocation, sorting, and wage inequality," VfS Annual Conference 2020 (Virtual Conference): Gender Economics 224535, Verein für Socialpolitik / German Economic Association.
    2. Henry S Farber & Daniel Herbst & Ilyana Kuziemko & Suresh Naidu, 2021. "Unions and Inequality over the Twentieth Century: New Evidence from Survey Data," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 136(3), pages 1325-1385.
    3. Baumgarten, Daniel & Lehwald, Sybille, 2019. "Trade Exposure and the Decline in Collective Bargaining: Evidence From Germany," Rationality and Competition Discussion Paper Series 165, CRC TRR 190 Rationality and Competition.
    4. Müller, Steffen & Dettmann, Eva & Fackler, Daniel & Neuschäffer, Georg & Slavtchev, Viktor & Leber, Ute & Schwengler, Barbara, 2018. "Lohnunterschiede zwischen Betrieben in Ost- und Westdeutschland: Ausmaß und mögliche Erklärungsfaktoren. Ergebnisse aus dem IAB-Betriebspanel 2017," IAB-Forschungsbericht 201806, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    5. Daniel Baumgarten & Gabriel Felbermayr & Sybille Lehwald, 2020. "Dissecting Between‐Plant and Within‐Plant Wage Dispersion: Evidence from Germany," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 59(1), pages 85-122, January.
    6. Mertens, Matthias, 2019. "Micro-mechanisms behind declining labour shares: Market power, production processes, and global competition," IWH-CompNet Discussion Papers 3/2019, Halle Institute for Economic Research (IWH).
    7. Thang Ngoc Bach & Canh Quang Le & Thang Van Nguyen, 2021. "Rent Sharing, Investment, and Collective Bargaining: Evidence from Employee‐Level Data in Vietnam," The Developing Economies, Institute of Developing Economies, vol. 59(1), pages 3-38, March.
    8. Ellguth Peter & Kohaut Susanne, 2019. "A Note on the Decline of Collective Bargaining Coverage: The Role of Structural Change," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 239(1), pages 39-66, January.
    9. Julián Martinez Correa & Carlo Lombardo & Belén Bentivegna, 2018. "Convenio Colectivo, Sindicatos y Dispersión Salarial: Evidencia de Argentina," CEDLAS, Working Papers 0232, CEDLAS, Universidad Nacional de La Plata.

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    More about this item

    Keywords

    firm wage premium; industrial relations; trade unions; works councils; bargaining power; rent sharing; wage inequality; Germany;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence

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