Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/21019
Authors: 
Hübler, Olaf
Meyer, Wolfgang
Year of Publication: 
2000
Series/Report no.: 
IZA Discussion paper series 176
Abstract: 
Increased wage inequality between skilled and unskilled workers is a stylized fact, which can be observed in many developed countries. Among the explanations advanced for this phenomenon is the increasing globalization, a skill-biased technical progress, restructuring of the firms, and last but not least, a decreasing importance of industrial relations institutions. In the paper, we investigate in a three-step procedure with firms? data whether the latter determinant is influential. We control for the other relevant explanations and split industrial relations into three components - coverage of collective bargaining, existence of a works council, and union density – within a four-equation model. We find an insignificant influence of the union density. A Works council compresses the wage differentials between skilled and unskilled blue-collar workers while coverage is effective in the opposite direction. The latter two effects nearly offset each other.
Subjects: 
Wage differentials
skilled and unskilled labour
union density
works councils
coverage of collective bargaining
JEL: 
J51
J31
Document Type: 
Working Paper

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