Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/234585
Authors: 
Dobbelaere, Sabien
Hirsch, Boris
Müller, Steffen
Neuschäffer, Georg
Year of Publication: 
2020
Series/Report no.: 
Working Paper Series in Economics No. 396
Abstract: 
This paper examines how collective bargaining through unions and workplace codetermination through works councils shape labour market imperfections and how labour market imperfections matter for employer wage premia. Based on representative German plant data for the years 1999-2016, we document that labour market imperfections are the norm rather than the exception. Wage mark-downs, that is wages below the marginal revenue product of labour rooted in employers' monopsony power, are the most prevalent outcome. We further find that both types of organised labour are accompanied by a smaller prevalence and intensity of wage mark-downs whereas the opposite holds for wage mark-ups, that is wages above the marginal revenue product of labour rooted in workers' monopoly power. Finally, we document a close link between our production-based labour market imperfection measures and employer wage premia. The prevalence and intensity of wage mark-downs are associated with a smaller level and larger dispersion of premia whereas wage mark-ups are only accompanied by a higher premium level.
Subjects: 
wage mark-downs
wage mark-ups
collective wage agreements
works councils
employer wage premia
JEL: 
J42
J50
J31
D22
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.