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Union Bargaining and Intra-Industry Productivity Differentials: Theory and Evidence from Germany

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  • Brändle, Tobias
  • Baumann, Florian

Abstract

This paper indicates that the extent of collective bargaining coverage in an industry may depend on the differences in firms productivity levels within the industry. Less pronounced differences in productivity levels make it easier to design collective wage contracts that are accepted by a wider range of firms within an industry. Higher dispersion in productivity levels gives rise to the use of firm-level wage agreements reached by unions, while coverage by industry-wide contracts is likely to decrease. We measure correlations between productivity variation and collective bargaining coverage in various industries using German linked-employer-employee data from 2000-2008 and find that the share of industry-wide collective bargaining agreements may indeed be negatively correlated with the dispersion of plant productivity within an industry, while the opposite might hold true for firm-level contracts.

Suggested Citation

  • Brändle, Tobias & Baumann, Florian, 2013. "Union Bargaining and Intra-Industry Productivity Differentials: Theory and Evidence from Germany," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79852, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc13:79852
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure

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