TY - JOUR

T1 - Firm wage premia, industrial relations, and rent sharing in Germany

AU - Hirsch, Boris

AU - Müller, Steffen

N1 - Funding Information: We thank Paul Beaudry, Michael Böhm, Alex Bryson, Michael Burda, Stefano Collonello, Bernd Fitzenberger, Hanna Frings, Giovanni Gallipoli, Nicole Gürtzgen, Florian Hoffmann, Pat Kline, Claus Schnabel, Heiko Stüber, and two referees for very useful suggestions. We further appreciate comments by participants of the SOLE 2017 and VfS 2017 conferences and the Pakt Project Workshop on “Worker Flows, Match Quality, and Productivity” and by seminar participants in Berkeley, Berlin, Lüneburg, and Vancouver. Last but not least, we thank Alexander Giebler and Georg Märker for excellent research assistance. Publisher Copyright: © The Author(s) 2020.

PY - 2020/10/1

Y1 - 2020/10/1

N2 - The authors use three distinct methods to investigate the influence of industrial relations on firm wage premia in Germany. First, ordinary least squares (OLS) regressions for the firm effects from a two-way fixed-effects decomposition of workers’ wages reveal that average premia are larger in firms bound by collective agreements and in firms with a works council, holding constant firm performance. Next, recentered influence function (RIF) regressions show that premia are less dispersed among covered firms but more dispersed among firms with a works council. Finally, in an Oaxaca–Blinder decomposition, the authors find that decreasing bargaining coverage is the only factor they consider that contributes to the marked rise in premia dispersion over time.

AB - The authors use three distinct methods to investigate the influence of industrial relations on firm wage premia in Germany. First, ordinary least squares (OLS) regressions for the firm effects from a two-way fixed-effects decomposition of workers’ wages reveal that average premia are larger in firms bound by collective agreements and in firms with a works council, holding constant firm performance. Next, recentered influence function (RIF) regressions show that premia are less dispersed among covered firms but more dispersed among firms with a works council. Finally, in an Oaxaca–Blinder decomposition, the authors find that decreasing bargaining coverage is the only factor they consider that contributes to the marked rise in premia dispersion over time.

KW - Economics

KW - firm wage premium

KW - industrial relations

KW - trade unions

KW - works councils

KW - bargaining power

KW - rent sharing

KW - wage inequality

KW - Germany

UR - http://www.scopus.com/inward/record.url?scp=85084820001&partnerID=8YFLogxK

U2 - 10.1177/0019793920917105

DO - 10.1177/0019793920917105

M3 - Journal articles

VL - 73

SP - 1119

EP - 1146

JO - Industrial and Labor Relations Review

JF - Industrial and Labor Relations Review

SN - 0019-7939

IS - 5

ER -