Central Wage Bargaining and Local Wage Flexibility : Evidence from the Entire Wage Distribution

Büttner, Thiess ; Fitzenberger, Bernd

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URL: https://ub-madoc.bib.uni-mannheim.de/656
Additional URL: ftp://ftp.zew.de/pub/zew-docs/cepr/Papers/buettner...
URN: urn:nbn:de:bsz:180-madoc-6569
Document Type: Working paper
Year of publication: 1998
The title of a journal, publication series: Discussion Paper / ZEW
Volume: 98-39
Place of publication: Mannheim
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
Subject headings (SWD): Deutschland , Arbeitsmarkt , Tariflohn , Bildung
Abstract: We argue that in labor markets with central wage bargaining wage flexibility varies systematically across the wage distribution: local wage flexibility is more relevant for the upper part of the wage distribution, and flexibility of wages negotiated under central wage bargaining affects the lower part of the wage distribution. Using a random sample of German social-security accounts, we estimate wage flexibility across the wage distribution by means of quantile regressions. The results support our hypothesis, as employees with low wages have significantly lower local wage flexibility than high wage employees. This effect is particularly relevant for the lower educational groups. On the other hand, employees with low wages tend to have a higher wage flexibility with respect to national unemployment.
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