IDEAS home Printed from https://ideas.repec.org/a/bla/brjirl/v62y2024i2p335-357.html
   My bibliography  Save this article

Collective bargaining and power: Wage premium of collective agreements in Europe 2002–2018

Author

Listed:
  • Wouter Zwysen
  • Jan Drahokoupil

Abstract

This article uses the European Structure of Earnings Survey to describe the evolution of collective bargaining coverage in European countries during 2002–2018 and how this affected the pay premium associated with being covered. Pay premia are an outcome of negotiations, reflecting the bargaining power on behalf of employees as well as the system of coverage, separately for the public and private sector. Descriptively, we show a decline in collective bargaining coverage linked to a general reduction in the pay differences. This hides much variation though. In a multivariate analysis of changes over time, we show that centrally bargained agreements are associated with larger pay premia if more people are covered and in countries and sectors with stronger trade unions. As this power declines over time, so do wage premia. At higher rates of coverage, there can be a spillover effect where wages for all workers increase, thereby reducing the premia.

Suggested Citation

  • Wouter Zwysen & Jan Drahokoupil, 2024. "Collective bargaining and power: Wage premium of collective agreements in Europe 2002–2018," British Journal of Industrial Relations, London School of Economics, vol. 62(2), pages 335-357, June.
    • Handle: RePEc:bla:brjirl:v:62:y:2024:i:2:p:335-357
    DOI: 10.1111/bjir.12777
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/bjir.12777
    Download Restriction: no
    File URL: https://libkey.io/10.1111/bjir.12777?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Bernd Fitzenberger & Karsten Kohn & Alexander C. Lembcke, 2013. "Union Density and Varieties of Coverage: The Anatomy of Union Wage Effects in Germany," ILR Review, Cornell University, ILR School, vol. 66(1), pages 169-197, January.
    2. Erling Barth & Oddbjørn Raaum & Robin Naylor, 2000. "Union Wage Effects: Does Membership Matter?," Manchester School, University of Manchester, vol. 68(3), pages 259-275, June.
    3. Ihsaan Bassier, 2022. "Collective bargaining and spillovers in local labor markets," CEP Discussion Papers dp1895, Centre for Economic Performance, LSE.
    4. Tito Boeri & Jan van Ours, 2013. "The Economics of Imperfect Labor Markets: Second Edition," Economics Books, Princeton University Press, edition 1, number 10142.
    5. Andrea Garnero, 2021. "The impact of collective bargaining on employment and wage inequality: Evidence from a new taxonomy of bargaining systems," European Journal of Industrial Relations, , vol. 27(2), pages 185-202, June.
    6. Ramos, Raul & Sanromá, Esteban & Simón, Hipólito, 2022. "Collective bargaining levels, employment and wage inequality in Spain," Journal of Policy Modeling, Elsevier, vol. 44(2), pages 375-395.
    7. Magda, Iga & Marsden, David & Moriconi, Simone, 2016. "Lower coverage but stronger unions? Institutional changes and union wage premia in Central Europe," Journal of Comparative Economics, Elsevier, vol. 44(3), pages 638-656.
    8. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-442, June.
    9. Andrea Garnero & François Rycx & Isabelle Terraz, 2020. "Productivity and Wage Effects of Firm‐Level Collective Agreements: Evidence from Belgian Linked Panel Data," British Journal of Industrial Relations, London School of Economics, vol. 58(4), pages 936-972, December.
    10. Bassier, Ihsaan, 2022. "Collective bargaining and spillovers in local labor markets," LSE Research Online Documents on Economics 118057, London School of Economics and Political Science, LSE Library.
    11. repec:bla:manchs:v:68:y:2000:i:3:p:259-75 is not listed on IDEAS
    12. Gesine Stephan & Knut Gerlach, 2005. "Wage settlements and wage setting: results from a multi-level model," Applied Economics, Taylor & Francis Journals, vol. 37(20), pages 2297-2306.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Brändle, Tobias, 2024. "Unions and Collective Bargaining: The Influence on Wages, Employment and Firm Survival," GLO Discussion Paper Series 1457, Global Labor Organization (GLO).
    2. Ramos, Raul & Sanromá, Esteban & Simón, Hipólito, 2022. "Collective bargaining levels, employment and wage inequality in Spain," Journal of Policy Modeling, Elsevier, vol. 44(2), pages 375-395.
    3. Antonczyk, Dirk & Fitzenberger, Bernd & Sommerfeld, Katrin, 2010. "Rising wage inequality, the decline of collective bargaining, and the gender wage gap," Labour Economics, Elsevier, vol. 17(5), pages 835-847, October.
    4. John T. Addison & Paulino Teixeira & Thomas Zwick, 2010. "German Works Councils and the Anatomy of Wages," ILR Review, Cornell University, ILR School, vol. 63(2), pages 247-270, January.
    5. Ramos, Raul & Sanromá, Esteban & Simón, Hipólito, 2018. "Wage Differentials by Bargaining Regime in Spain (2002-2014): An Analysis Using Matched Employer-Employee Data," IZA Discussion Papers 12013, Institute of Labor Economics (IZA).
    6. Heinze, Anja, 2010. "Beyond the mean gender wage gap: Decomposition of differences in wage distributions using quantile regression," ZEW Discussion Papers 10-043, ZEW - Leibniz Centre for European Economic Research.
    7. John Addison & Paulino Teixeira & Katalin Evers & Lutz Bellmann, 2014. "Indicative and Updated Estimates of the Collective Bargaining Premium in Germany," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 53(1), pages 125-156, January.
    8. Nicole Gürtzgen, 2016. "Estimating the Wage Premium of Collective Wage Contracts: Evidence from Longitudinal Linked Employer–Employee Data," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 55(2), pages 294-322, April.
    9. John Addison & Paulino Teixeira & Jens Stephani & Lutz Bellmann, 2012. "Can German Unions Still Cut It?," GEMF Working Papers 2012-19, GEMF, Faculty of Economics, University of Coimbra.
    10. Guertzgen Nicole, 2009. "Firm Heterogeneity and Wages under Different Bargaining Regimes: Does a Centralised Union Care for Low-Productivity Firms?," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 229(2-3), pages 239-253, April.
    11. David Card & Jörg Heining & Patrick Kline, 2013. "Workplace Heterogeneity and the Rise of West German Wage Inequality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(3), pages 967-1015.
    12. Elin Svarstad & Ragnar Nymoen, 2023. "Wage inequality and union membership at the establishment level: An econometric study using Norwegian data," Oxford Economic Papers, Oxford University Press, vol. 75(2), pages 371-392.
    13. Silliman, Mikko & Willén, Alexander, 2024. "Worker Power, Immigrant Sorting, and Firm Dynamics," Discussion Paper Series in Economics 13/2024, Norwegian School of Economics, Department of Economics.
    14. Addison, John T. & Teixeira, Paulino & Stephani, Jens & Bellmann, Lutz, 2014. "Union Decline and the Coverage Wage Gap in Germany," IZA Discussion Papers 8257, Institute of Labor Economics (IZA).
    15. Pia Rattenhuber, 2014. "Building the minimum wage: the distributional impact of Germany’s first sectoral minimum wage on wages and hours across different wage bargaining regimes," Empirical Economics, Springer, vol. 46(4), pages 1429-1446, June.
    16. Thang Ngoc Bach & Canh Quang Le & Thang Van Nguyen, 2021. "Rent Sharing, Investment, and Collective Bargaining: Evidence from Employee‐Level Data in Vietnam," The Developing Economies, Institute of Developing Economies, vol. 59(1), pages 3-38, March.
    17. Erling Barth & Alex Bryson & Harald Dale-Olsen, 2017. "Union Density, Productivity, and Wages," DoQSS Working Papers 17-11, Quantitative Social Science - UCL Social Research Institute, University College London.
    18. repec:rim:rimwps:13-07 is not listed on IDEAS
    19. Biewen, Martin & Seckler, Matthias, 2017. "Changes in the German Wage Structure: Unions, Internationalization, Tasks, Firms, and Worker Characteristics," IZA Discussion Papers 10763, Institute of Labor Economics (IZA).
    20. repec:rim:rimwps:11-08 is not listed on IDEAS
    21. Addison, John T. & Teixeira, Paulino & Zwick, Thomas, 2006. "Works Councils and the Anatomy of Wages," IZA Discussion Papers 2474, Institute of Labor Economics (IZA).
    22. Brüll, Eduard & Gathmann, Christina, 2020. "Evolution of the East German wage structure," ZEW Discussion Papers 20-081, ZEW - Leibniz Centre for European Economic Research.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:brjirl:v:62:y:2024:i:2:p:335-357. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.