Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/24108
Authors: 
Gürtzgen, Nicole
Year of Publication: 
2005
Series/Report no.: 
ZEW Discussion Papers 05-15
Abstract: 
This paper analyses whether wages in Germany respond to firm-specific profitability conditions. Particular emphasis lies on the question of whether the extent of rent-sharing varies across different systems of wage determination. Those may be categorised into sector-specific wage agreements, firm-specific wage agreements and wage determination without any bargaining coverage. To derive testable hypotheses, we set up a theoretical model that analyses the sensitivity of wages to firm-specific conditions under different wage setting structures. The hypotheses are tested using an establishment-level panel data set from the mining and manufacturing sector. The results of the empirical analysis generally suggest that rent-sharing is present in Germany. However, the extent of rent-sharing is found to be significantly lower in establishments that are subject to a collective wage agreement - irrespective of whether the agreement is industry- or firm-specific. While pooled OLS estimates yield positive estimates of the rent-sharing coefficient in establishments that are covered by a collective contract, SYS-GMM-estimates accounting for unobserved heterogeneity and endogeneity of rents point to a rent-sharing coefficient of zero.
Subjects: 
Rent-Sharing
Wage-Setting Structure
Unions
Panel Data
JEL: 
J31
C23
J51
Document Type: 
Working Paper

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