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Title:Tarifpolitik und Entgeltflexibilität in Ostdeutschland PDF Logo
Authors:Bonin, Holger
Issue Date:2005
Series/Report no.:IZA Discussion Papers 1871
Abstract:The paper explores wage setting practice in East Germany since unification. It gathers evidence for the claim that economically non-viable collective agreements have fostered decentralized wage setting. First, we document declining organization rates of both employers and employees, allowing drift between collective and actual wages. Second, we examine macroeconomic wage flexibility by estimating a switching regime model, in which the observed distribution of individual wage changes is generated by simultaneous processes of union, nominal or no wage rigidity. The results indicate that wages become more flexible during transition. Furthermore nominal wage rigidity, typical for decentralized bargaining, is much more common in East than in West Germany, while the opposite holds regarding union wage rigidity.
Subjects:wage rigidity
East Germany
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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