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Title:To bind or not to bind collectively?: decomposition of bargained wage differences using counterfactual distributions PDF Logo
Authors:Heinbach, Wolf Dieter
Spindler, Markus
Issue Date:2007
Series/Report no.:IAW-Diskussionspapiere 36
Abstract:Collective bargaining agreements still play an important role in the German wage setting system. Both existing theoretical and empirical studies find that collective bargaining leads to higher wages compared to individually agreed ones. However, the impact of collective bargaining on the wage level may be very different along the wage distribution. As unions aim at compressing the wage distribution, one might expect that for covered workers' wages in the lower part of the distribution workers' individual characteristics may be less important than the coverage by a collective contract. In contrast, the relative importance of workers' individual characteristics may rise in the upper part of the wage distribution, whereas the overall wage difference might decline. Using the newly available German Structure of Earnings Survey (GSES) 1995 and 2001, a cross-sectional linked employer-employee-dataset from German official statistics, this study analyses the difference between collectively and individually agreed wages using a Machado/Mata (2005) decomposition type technique.
Subjects:collective bargaining
wage structure
wage decomposition
quantile regression
JEL:J31
J51
C13
Document Type:Working Paper
Appears in Collections:IAW-Diskussionspapiere, Institut für Angewandte Wirtschaftsforschung (IAW)

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