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Union density and varieties of coverage: the anatomy of union wage effects in Germany

Fitzenberger, Bernd, Kohn, Karsten and Lembcke, Alexander (2013) Union density and varieties of coverage: the anatomy of union wage effects in Germany. Industrial and Labor Relations Review, 66 (1). pp. 169-197. ISSN 0019-7939

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Abstract

Collective bargaining in Germany takes place at either industry or firm level, and bargaining coverage is much higher than union density. The share of a firm's employees covered can vary between 0% and 100%, suggesting that researchers should distinguish union density, coverage at the firm level, and coverage at the individual level. Using linked employer-employee data, the authors estimate OLS and quantile regressions of wages on these dimensions of union influence. They find that a higher share of employees in a firm covered by industrywide or firm-specific contracts is associated with higher wages but find no clear-cut effect on wage dispersion. Yet, holding coverage at the firm level constant, individual coverage is associated with lower wages and less wage dispersion. Higher union density reinforces the effects of coverage. But for employees in firms without coverage, density's effect is negative and thus compresses the wage distribution in firms without coverage.

Item Type: Article
Official URL: http://www.ilr.cornell.edu/ilrreview/
Additional Information: © 2013 by Cornell University
Divisions: Economics
Centre for Economic Performance
Subjects: H Social Sciences > HN Social history and conditions. Social problems. Social reform
JEL classification: J - Labor and Demographic Economics > J5 - Labor-Management Relations, Trade Unions, and Collective Bargaining > J51 - Trade Unions: Objectives, Structure, and Effects
J - Labor and Demographic Economics > J5 - Labor-Management Relations, Trade Unions, and Collective Bargaining > J52 - Dispute Resolution: Strikes, Arbitration, and Mediation; Collective Bargaining
J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure; Wage Differentials by Skill, Training, Occupation, etc.
Sets: Departments > Economics
Research centres and groups > Centre for Economic Performance (CEP)
Date Deposited: 18 Mar 2013 13:07
Last Modified: 20 Sep 2019 01:41
URI: http://eprints.lse.ac.uk/id/eprint/49215

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