Industry-Level Wage Bargaining: A Partial Rehabilitation -The German Experience-

Fitzenberger, Bernd ; Franz, Wolfgang

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URN: urn:nbn:de:bsz:180-madoc-6114
Document Type: Working paper
Year of publication: 1999
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: J31 J51 ,
Subject headings (SWD): Deutschland , Arbeitslosigkeit , Lohn , Dezentralisation
Abstract: In order to reduce unemployment, it is often recommended that industry-level wage bargaining in Germany should be replaced by a more decentralized system. This paper provides a critical assessment of the current wage bargaining institutions and reexamines the case for a more decentralized system. Based on a theoretical model integrating Insider-Outsider aspects into the comparison, the uniformly superior employment performance of a decentralized wage bargaining system is questioned. We conclude that, rather tha solely trying to decentralize wage bargaining, a promising policy option may be to improve the skills of the unemployment by efficient labour market policies and to foster institutional reforms such that wage bargaining takes account of the long-run employment consequences of wage setting.
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Fitzenberger, Bernd ; Franz, Wolfgang (1999) Industry-Level Wage Bargaining: A Partial Rehabilitation -The German Experience-. Open Access [Working paper]

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