Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/35527
Authors: 
Jung, Sven
Schnabel, Claus
Year of Publication: 
2009
Series/Report no.: 
IZA Discussion Papers 4278
Abstract: 
Using a representative establishment data set for Germany, we show that more than 40 percent of plants covered by collective agreements pay wages above the level stipulated in the agreement, which gives rise to a wage cushion between the levels of actual and contractual wages. Cross-sectional and fixed-effects estimations for the period 2001-2006 indicate that the wage cushion mainly varies with the profit situation of the plant and with indicators of labour shortage and the business cycle. While plants bound by multi-employer sectoral agreements seem to pay wage premiums in order to overcome the restrictions imposed by the rather centralized system of collective bargaining in Germany, plants which make use of single-employer agreements are significantly less likely to have wage cushions.
Subjects: 
Wages
wage cushion
wage determination
bargaining
Germany
JEL: 
J30
J31
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size
201.75 kB





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