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The Wage Gap in Manufacturing in Germany: Size and Determinants

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  • Wolfgang Meyer

Abstract

Wages in Germany are usually fixed in a two‐step process. Firstly, unions and employers' associations negotiate wage agreements at industry level. Secondly, the sectoral wage is modified at establishment level according to the demands of management, works councils and individual employees. Since contract wages are minimum standards, the modifications may only favour the employees. A positive wage gap appears. The paper aims to analyse this second step of wage fixing. Data on the size of the wage gap are presented, determinants of the gap are discussed theoretically and, finally, the hypotheses are tested by regression analysis.

Suggested Citation

  • Wolfgang Meyer, 1997. "The Wage Gap in Manufacturing in Germany: Size and Determinants," LABOUR, CEIS, vol. 11(3), pages 561-577, November.
    • Handle: RePEc:bla:labour:v:11:y:1997:i:3:p:561-577
    DOI: 10.1111/1467-9914.00050
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    Cited by:

    1. Uwe Jirjahn, 2013. "Der Beitrag der Arbeitsmarktökonomik zur Erforschung von Gewerkschaften und Tarifvertragsbeziehungen in Deutschland," Research Papers in Economics 2013-03, University of Trier, Department of Economics.
    2. Uwe Jirjahn, 2015. "Research on Trade Unions and Collective Bargaining in Germany: The Contribution of Labor Economics," Research Papers in Economics 2015-10, University of Trier, Department of Economics.

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