IDEAS home Printed from https://ideas.repec.org/p/zbw/cofedp/0024.html
   My bibliography  Save this paper

Efficient Bargaining and the Skill-Structure of Wages and Employment

Author

Listed:
  • Kaiser, Ulrich
  • Pohlmeier, Winfried

Abstract

This paper presents structural estimates for a bargaining model which nests the right-to-manage, the efficient wage bargaining, the seniority and the standard neo- classical labor demand model as special cases. In contrast to most existing models, our approach accounts for heterogeneous skill groups which differ in terms of productivity and representation in the bargaining process through union preferences. The paper in- troduces the concept of `virtual' firms which allows us to (i) test the eÆcient contract model against models implying that firms operate on the labor demand curve and to (i) overcome a potential misspecification of firms' output markets. Estimates of structural parameters are obtained from a novel cross{section of German firms of the business related service sector which includes information on skill-specific wage rates at the firm level. Central results of this paper are that unions do care about both wages and employment in the bargaining process and that firms operate on the contract curve. The bargaining power of unions in East Germany turns out to be much weaker than in West Germany.

Suggested Citation

  • Kaiser, Ulrich & Pohlmeier, Winfried, 2000. "Efficient Bargaining and the Skill-Structure of Wages and Employment," CoFE Discussion Papers 00/24, University of Konstanz, Center of Finance and Econometrics (CoFE).
    • Handle: RePEc:zbw:cofedp:0024
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/85205/1/dp00-24.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Fitzenberger, Bernd & Franz, Wolfgang, 1999. "Industry-level wage bargaining : a partial rehabilitation ; the German experience," ZEW Discussion Papers 99-33, ZEW - Leibniz Centre for European Economic Research.
    2. Oswald, A. J., 1995. "Efficient contracts are on the labour demand curve: Theory and facts," Labour Economics, Elsevier, vol. 2(1), pages 102-102, March.
    3. Kaiser, Ulrich & Kreuter, Markus & Niggemann, Hiltrud, 2000. "The ZEW - Creditreform business survey in the business-related services sector : sampling frame, stratification, expansion and results," ZEW Discussion Papers 00-22, ZEW - Leibniz Centre for European Economic Research.
    4. Pencavel, John & Holmlund, Bertil, 1988. "The Determination of Wages, Employment, and Work Hours in an Economy with Centralised Wage-Setting: Sweden, 1950-83," Economic Journal, Royal Economic Society, vol. 98(393), pages 1105-1126, December.
    5. Wolfgang Scheremet, 1995. "Tarifpolitik in Ostdeutschland: Ausstieg aus dem Lohnverhandlungsmodell der Bundesrepublik Deutschland?," Discussion Papers of DIW Berlin 113, DIW Berlin, German Institute for Economic Research.
    6. McDonald, Ian M & Solow, Robert M, 1981. "Wage Bargaining and Employment," American Economic Review, American Economic Association, vol. 71(5), pages 896-908, December.
    7. Nickell, Stephen & Layard, Richard, 1999. "Labor market institutions and economic performance," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 46, pages 3029-3084, Elsevier.
    8. Manning, Alan, 1987. "An Integration of Trade Union Models in a Sequential Bargaining Framework," Economic Journal, Royal Economic Society, vol. 97(385), pages 121-139, March.
    9. Bughin, Jacques, 1996. "Trade Unions and Firms' Product Market Power," Journal of Industrial Economics, Wiley Blackwell, vol. 44(3), pages 289-307, September.
    10. repec:bla:scotjp:v:46:y:1999:i:4:p:437-57 is not listed on IDEAS
    11. Kaiser, Ulrich & Pfeiffer, Friedhelm, 2000. "Collective wage agreements and the adjustment of workers and hours in German service firms," ZEW Discussion Papers 00-33, ZEW - Leibniz Centre for European Economic Research.
    12. repec:eee:labchp:v:3:y:1999:i:pc:p:3029-3084 is not listed on IDEAS
    13. Kaiser, Ulrich, 2000. "A note on the calculation of firm-specific and skill-specific labor costs from firm-Ievel data," ZEW Discussion Papers 00-08, ZEW - Leibniz Centre for European Economic Research.
    14. Martinello, Felice, 1989. "Wage and Employment Determination in a Unionized Industry: The IWA and the British Columbia Wood Products Industry," Journal of Labor Economics, University of Chicago Press, vol. 7(3), pages 303-330, July.
    15. Siebert, Horst, 1997. "Labor market rigidities and unemployment in Europe," Kiel Working Papers 787, Kiel Institute for the World Economy (IfW Kiel).
    16. repec:bla:scandj:v:95:y:1993:i:3:p:297-310 is not listed on IDEAS
    17. Richard B. Freeman, 1995. "Are Your Wages Set in Beijing?," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 15-32, Summer.
    18. Bean, Charles R & Turnbull, Peter J, 1988. "Employment in the British Coal Industry: A Test of the Labour Demand Model," Economic Journal, Royal Economic Society, vol. 98(393), pages 1092-1104, December.
    19. Horst Siebert, 1997. "Labor Market Rigidities: At the Root of Unemployment in Europe," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 37-54, Summer.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Thomas Ziesemer, 2003. "Information and Communication Technology as Technical Change in Matching and Production," Journal of Economics, Springer, vol. 79(3), pages 263-287, July.
    2. Kaiser Ulrich, 2000. "A Note on the Calculation of Firm-specific and Skill-specific Labor Costs from Firm-level Data / Zur Berechnung von qualifikations- und firmenspezifischen Arbeitskosten auf der Grundlage von Firmendat," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 220(5), pages 541-551, October.

    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. Nicholas Lawson, 2011. "Is Collective Bargaining Pareto Efficient? A Survey of the Literature," Journal of Labor Research, Springer, vol. 32(3), pages 282-304, September.
    2. António Brandão & Joana Pinho, 2018. "Productivity Shocks in a Union‐Duopoly Model," Manchester School, University of Manchester, vol. 86(6), pages 722-756, December.
    3. Afonso, Óscar, 2016. "Effects of labour-market institutions on employment, wages, R&D intensity and growth in 27 OECD countries: From theory to practice," Economic Modelling, Elsevier, vol. 53(C), pages 48-62.
    4. Paul Heidhues, 2000. "Employers’ Associations, Industry-wide Unions, and Competition," CIG Working Papers FS IV 00-11, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
    5. Fung, K.C. & C. Lin, Chelsea, 2005. "European Economic Integration and the Effectiveness of Employment Policies," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 20, pages 419-438.
    6. Marco Guerrazzi & Pier Giuseppe Giribone, 2021. "Dynamic wage bargaining and labour market fluctuations: the role of productivity shocks," SN Business & Economics, Springer, vol. 1(8), pages 1-20, August.
    7. Giuseppe Bertola & Francine Blau & Lawrence Kahn, 2007. "Labor market institutions and demographic employment patterns," Journal of Population Economics, Springer;European Society for Population Economics, vol. 20(4), pages 833-867, October.
    8. repec:pri:indrel:dsp01cc08hf62w is not listed on IDEAS
    9. Ulman, Lloyd & Gerlach, Knut, 2002. "The Uneasy Triangle," Institute of European Studies, Working Paper Series qt2dd6z05p, Institute of European Studies, UC Berkeley.
    10. Ulman, Lloyd & Gerlach, Knut, 2003. "An essay on collective bargaining and unemployment in Germany," Institute for Research on Labor and Employment, Working Paper Series qt16v5m721, Institute of Industrial Relations, UC Berkeley.
    11. Ansgar Belke & Rainer Fehn & Neil Foster, 2001. "Venture Capital Investment and Labor Market Performance: A Panel Data Analysis," Diskussionspapiere aus dem Institut für Volkswirtschaftslehre der Universität Hohenheim 197/2001, Department of Economics, University of Hohenheim, Germany.
    12. Seele, Stefanie & Burda, Michael, 2016. "No Role for the Hartz Reforms? Demand and Supply Factors in the German Labor Market, 1993-2014," VfS Annual Conference 2016 (Augsburg): Demographic Change 145650, Verein für Socialpolitik / German Economic Association.
    13. Hübler, Olaf & Meyer, Wolfgang, 2000. "Industrial Relations and the Wage Differentials between Skilled and Unskilled Blue-Collar Workers within Establishments: An Empirical Analysis with Data of Manufacturing Firms," IZA Discussion Papers 176, Institute of Labor Economics (IZA).
    14. Andrews, Martyn & Harrison, Alan, 1998. "Testing for Efficient Contracts in Unionized Labour Markets," Bulletin of Economic Research, Wiley Blackwell, vol. 50(3), pages 171-200, July.
    15. Sujit Kapadia, 2003. "The Capital Stock and Equilibrium Unemployment: A New Theoretical Perspective," Economics Series Working Papers 181, University of Oxford, Department of Economics.
    16. Puhani, Patrick, 2001. "Wage Rigidities in Western Germany: Microeconometric Evidence from the 1990s," CEPR Discussion Papers 3009, C.E.P.R. Discussion Papers.
    17. John T. Addison & Orgul Demet Ozturk, 2012. "Minimum Wages, Labor Market Institutions, and Female Employment: A Cross-Country Analysis," ILR Review, Cornell University, ILR School, vol. 65(4), pages 779-809, October.
    18. Alfred Stiglbauer, 2006. "The (New) OECD Jobs Study: Introduction and Assessment," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 3, pages 58-74.
    19. repec:hum:wpaper:sfb649dp2016-010 is not listed on IDEAS
    20. Rainer Fehn & Carsten-Patrick Meier, 2001. "The Positive Economics of Labor Market Rigidities and Investor Protection," CESifo Working Paper Series 456, CESifo.
    21. Toke Aidt & Zafiris Tzannatos, 2002. "Unions and Collective Bargaining : Economic Effects in a Global Environment," World Bank Publications - Books, The World Bank Group, number 15241.
    22. Jonas Agell, 2000. "On the Determinants of Labour Market Institutions: Rent-Sharing vs. Social Insurance," CESifo Working Paper Series 384, CESifo.

    More about this item

    JEL classification:

    • L8 - Industrial Organization - - Industry Studies: Services
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

    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:zbw:cofedp:0024. 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: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/zfkonde.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.