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Rent-sharing and collective wage contracts - evidence from German establishment-level data
[journal article]
Abstract Using German establishment-level data, this paper analyses whether wages
respond to firm-specific profitability conditions. Particular emphasis is
given to the question of whether the extent of rent-sharing varies with
collective bargaining coverage. In this context, two conflicting hypotheses
a... view more
Using German establishment-level data, this paper analyses whether wages
respond to firm-specific profitability conditions. Particular emphasis is
given to the question of whether the extent of rent-sharing varies with
collective bargaining coverage. In this context, two conflicting hypotheses
are tested. The first one asserts that unions exploit their bargaining power
at the firm-level and appropriate a larger share of rents than the
bargaining parties in uncovered firms. The second one states that unions
favour a compressed intra-industry wage structure and suppress the
responsiveness of wages to firm-specific profitability conditions.\ The
empirical analysis provides strong support for the second hypothesis. While
pooled OLS estimates yield positive estimates of the rent-sharing
coefficient in covered establishments, dynamic panel data estimates
accounting for unobserved heterogeneity and the endogeneity of rents point
to a rent-sharing coefficient of zero.... view less
Classification
Income Policy, Property Policy, Wage Policy
Document language
English
Publication Year
2009
Page/Pages
p. 2835-2854
Journal
Applied Economics, 42 (2009) 22
DOI
https://doi.org/10.1080/00036840801964708
Status
Postprint; peer reviewed
Licence
PEER Licence Agreement (applicable only to documents from PEER project)