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Wage bargaining or wage posting? Evidence from the employers' side

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  • Brenzel, Hanna
  • Gartner, Hermann
  • Schnabel, Claus

Abstract

Using a representative establishment dataset, this paper is the first to analyze the incidence of wage bargaining and wage posting in the matching process from the employers' side. We show that both modes of wage determination coexist in the German labor market, with more than one-third of hirings being characterized by individual wage negotiations. Wage bargaining is more likely for more-educated applicants, for jobs with special requirements, and in tight regional labor markets. Wage posting (in the sense of a fixed offer) dominates in the public sector, in larger firms, in firms covered by collective bargaining agreements, and in jobs involving part-time and fixed-term contracts. Job seekers who are unemployed, out of the labor force or have just finished an apprenticeship are also less likely to have a chance to negotiate.

Suggested Citation

  • Brenzel, Hanna & Gartner, Hermann & Schnabel, Claus, 2014. "Wage bargaining or wage posting? Evidence from the employers' side," Labour Economics, Elsevier, vol. 29(C), pages 41-48.
    • Handle: RePEc:eee:labeco:v:29:y:2014:i:c:p:41-48
    DOI: 10.1016/j.labeco.2014.05.004
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    More about this item

    Keywords

    Wage posting; Wage bargaining; Hiring; Matching; Germany;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions

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