Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/27613
Authors: 
Gürtzgen, Nicole
Year of Publication: 
2009
Series/Report no.: 
ZEW Discussion Papers 08-130
Abstract: 
This paper studies the relationship between wages and the degree of firm heterogeneity in a given industry under different wage setting structures. To derive testable hypotheses, we set up a theoretical model that analyses the sensitivity of wages to the variability in productivity conditions in a unionsised oligopoly framework. The model distinguishes centralised and decentralised wage determination. The theoretical results predict wages to be negatively associated with the degree of firm heterogeneity under centralised wage-setting, as unions internalise negative externalities of a wage increase for low-productivity firms. We test this prediction using a linked employeremployee panel data set from the German mining and manufacturing sector. Consistent with our hypotheses, the empirical results suggest that under industry-level bargaining workers in more heterogeneous sectors receive lower wages than workers in more homogeneous sectors. In contrast, the degree of firm heterogeneity is found to have no negative impact on wages in uncovered firms and under firm-level contracts.
Subjects: 
Wage-Setting Structure
Unions
Oligopoly
Linked Employer-Employee Data
JEL: 
J51
J31
C23
L13
Document Type: 
Working Paper

Files in This Item:
File
Size
241.34 kB





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