1. Publications
  2. IWH Discussion Papers, 2/2018
cover_DP_2018-02.jpg
published in : ILR Review

Firm Wage Premia, Industrial Relations, and Rent Sharing in Germany

This paper investigates the influence of industrial relations on firm wage premia in Germany. OLS regressions for the firm effects from a two-way fixed effects decomposition of workers’ wages by Card, Heining, and Kline (2013) document that average premia are larger in firms bound by collective agreements and in firms with a works council, holding constant firm performance. RIF regressions show that premia are less dispersed among covered firms but more dispersed among firms with a works council. Hence, deunionisation is the only among the suspects investigated that contributes to explaining the marked rise in the premia dispersion over time.

01. February 2018

Authors Boris Hirsch Steffen Müller

See Publication

Keywords

firm wage premium trade unions works councils bargaining power wage inequality

JEL Classification

J31 J52 J53

Suggested Reading

cover_industrial-and-labor-relations-review.png

Firm Wage Premia, Industrial Relations, and Rent Sharing in Germany

Boris Hirsch Steffen Müller

in: ILR Review, No. 5, 2020

Abstract

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.

read publication

Whom to contact

For Researchers

Professor Dr Steffen Müller
Professor Dr Steffen Müller
Department Head

If you have any further questions please contact me.

+49 345 7753-708 Request per E-Mail

For Journalists

Dr Wolfgang Sender
Dr Wolfgang Sender
Head of Public Relations

If you have any further questions please contact me.

+49 345 7753-720 Request per E-Mail
Mitglied der Leibniz-Gemeinschaft LogoTotal-Equality-LogoSupported by the BMWK