The Effect of Firm- and Industry-Level Contracts on Wages – Evidence from Longitudinal Linked Employer-Employee Data


Gürtzgen, Nicole


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URL: http://ub-madoc.bib.uni-mannheim.de/1465
URN: urn:nbn:de:bsz:180-madoc-14658
Document Type: Working paper
Year of publication: 2006
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: J51 J31 ,
Subject headings (SWD): Tarifverhandlung , Deutschland <Östliche Länder> , Deutschland <Westliche Länder> , Industrie
Keywords (English): Union Wage Premium , Collective Bargaining Coverage
Abstract: Using a large linked employer-employee data set, this paper presents new evidence on the collective bargaining wage effect in western and eastern Germany. The novel feature of our analysis is that we use a longitudinal data set. Thus, in contrast to previous studies, we seek to assess the extent to which differences in wages between workers in covered and uncovered firms really represent an effect of collective bargaining coverage, rather than a consequence of the non-random selection of workers and firms into the different regimes. By measuring the relative wage gains or losses of workers employed in firms that change contract status, we obtain estimates that depart considerably from previous results relying on cross-sectional data. Industry-level contracts in western Germany and firm-level contracts in eastern Germany are associated with a small, but statistically significant average wage premium of about 2 per cent. Moreover, wage decompositions indicate that the overall effect of collective bargaining coverage on the returns to observable attributes appears to be negligible once the selection into the regimes is accounted for.
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Gürtzgen, Nicole (2006) The Effect of Firm- and Industry-Level Contracts on Wages – Evidence from Longitudinal Linked Employer-Employee Data. Open Access [Working paper]
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