Organised Labour, Labour Market Imperfections, and Employer Wage Premia
Sabien Dobbelaer, Boris Hirsch, Steffen Müller, Georg Neuschäffer
CESifo Working Paper,
No. 8739,
2020
published in: ILR Review
Abstract
This paper examines how collective bargaining through unions and workplace co-determination through works councils shape labour market imperfections and how labourmarket imperfections matter for employer wage premia. Based on representative Germanplant data for the years 1999{2016, we document that labour market imperfections arethe norm rather than the exception. Wage mark-downs, that is wages below the marginalrevenue product of labour rooted in employers' monopsony power, are the most prevalentoutcome. We further nd that both types of organised labour are accompanied by asmaller prevalence and intensity of wage mark-downs whereas the opposite holds for wagemark-ups, that is wages above the marginal revenue product of labour rooted in workers'monopoly power. Finally, we document a close link between our production-based labourmarket imperfection measures and employer wage premia. The prevalence and intensityof wage mark-downs are associated with a smaller level and larger dispersion of premiawhereas wage mark-ups are only accompanied by a higher premium level.
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Organised Labour, Labour Market Imperfections, and Employer Wage Premia
Sabien Dobbelaer, Boris Hirsch, Steffen Müller, Georg Neuschäffer
Tinbergen Institute Discussion Paper,
No. 81,
2020
published in: ILR Review
Abstract
This paper examines how collective bargaining through unions and workplace co-determination through works councils shape labour market imperfections and how labourmarket imperfections matter for employer wage premia. Based on representative Germanplant data for the years 1999{2016, we document that labour market imperfections arethe norm rather than the exception. Wage mark-downs, that is wages below the marginalrevenue product of labour rooted in employers' monopsony power, are the most prevalentoutcome. We further nd that both types of organised labour are accompanied by asmaller prevalence and intensity of wage mark-downs whereas the opposite holds for wagemark-ups, that is wages above the marginal revenue product of labour rooted in workers'monopoly power. Finally, we document a close link between our production-based labourmarket imperfection measures and employer wage premia. The prevalence and intensityof wage mark-downs are associated with a smaller level and larger dispersion of premiawhereas wage mark-ups are only accompanied by a higher premium level.
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Organised Labour, Labour Market Imperfections, and Employer Wage Premia
Sabien Dobbelaer, Boris Hirsch, Steffen Müller, Georg Neuschäffer
IZA Discussion Paper,
No. 13909,
2020
published in: ILR Review
Abstract
This paper examines how collective bargaining through unions and workplace co-determination through works councils shape labour market imperfections and how labourmarket imperfections matter for employer wage premia. Based on representative Germanplant data for the years 1999{2016, we document that labour market imperfections arethe norm rather than the exception. Wage mark-downs, that is wages below the marginalrevenue product of labour rooted in employers' monopsony power, are the most prevalentoutcome. We further nd that both types of organised labour are accompanied by asmaller prevalence and intensity of wage mark-downs whereas the opposite holds for wagemark-ups, that is wages above the marginal revenue product of labour rooted in workers'monopoly power. Finally, we document a close link between our production-based labourmarket imperfection measures and employer wage premia. The prevalence and intensityof wage mark-downs are associated with a smaller level and larger dispersion of premiawhereas wage mark-ups are only accompanied by a higher premium level.
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Mission, Motivation, and the Active Decision to Work for a Social Cause
Sabrina Jeworrek, Vanessa Mertins
Abstract
The mission of a job does not only affect the type of worker attracted to an organisation, but may also provide incentives to an existing workforce. We conducted a natural field experiment with 267 short-time workers and randomly allocated them to either a prosocial or a commercial job. Our data suggest that the mission of a job itself has a performance enhancing motivational impact on particular individuals only, i.e., workers with a prosocial attitude. However, the mission is very important if it has been actively selected. Those workers who have chosen to contribute to a social cause outperform the ones randomly assigned to the same job by about 15 percent. This effect seems to be a universal phenomenon which is not driven by information about the alternative job, the choice itself or a particular subgroup.
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SMEs and Access to Bank Credit: Evidence on the Regional Propagation of the Financial Crisis in the UK
Hans Degryse, Kent Matthews, Tianshu Zhao
Journal of Financial Stability,
2018
Abstract
We study the sensitivity of banks’ credit supply to small and medium size enterprises (SMEs) in the UK with respect to the banks’ financial condition before and during the financial crisis. Employing unique data on the geographical location of all bank branches in the UK, we connect firms’ access to bank credit to the financial condition (i.e., bank health and the use of core deposits) of all bank branches in the vicinity of the firm for the period 2004–2011. Before the crisis, banks’ local financial conditions did not influence credit availability irrespective of the functional distance (i.e., the distance between bank branch and bank headquarters). However, during the crisis, we find that SMEs with banks within their vicinity that have stronger financial conditions faced greater credit availability when the functional distance is close. Our results point to a “flight to headquarters” effect during the financial crisis.
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Indirekte Effekte von als unfair wahrgenommenem Arbeitgeberverhalten auf die Produktivität von Beschäftigten
Sabrina Jeworrek
Wirtschaft im Wandel,
No. 3,
2018
Abstract
Jede Organisation, die darüber nachdenkt zu restrukturieren, Löhne zu kürzen oder Angestellte zu entlassen, sollte auch über mögliche Reaktionen der persönlich nicht betroffenen Arbeitnehmer nachdenken. Dieser Beitrag präsentiert Ergebnisse eines Feldexperiments. Es offenbart, dass die als unfair wahrgenommene Handlung des Arbeitgebers – in diesem Fall die Entlassung von Arbeitskollegen – die anschließende Produktivität der nicht direkt betroffenen Arbeitskräfte mindert. Als Teil des Experiments antizipierten erfahrene Personalmanager zwar im Durchschnitt erfolgreich die Konsequenzen unfairen Arbeitgeberverhaltens auf nicht betroffene Arbeitnehmer, einzeln lagen sie jedoch oft daneben.
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"The Good News about Bad News": Information about Past Organisational Failure and its Impact on Worker Productivity
Sabrina Jeworrek, Vanessa Mertins, Michael Vlassopoulos
Abstract
Failure in organisations is a very common phenomenon. Little is known about whether past failure affects workers’ subsequent performance. We conduct a field experiment in which we follow up a failed mail campaign to attract new volunteers with a phone campaign pursuing the same goal. We recruit temporary workers to carry out the phone campaign and randomly assign them to either receive or not receive information about the previous failure and measure their performance. We find that informed workers perform better – in terms of both numbers dialed (about 14% improvement) and completed interviews (about 20% improvement) – regardless of whether they had previously worked on the failed mail campaign. Evidence from a second experiment with student volunteers asked to support a campaign to reduce food waste suggests that the mechanism behind our finding relates to contextual inference: Informing workers/volunteers that they are pursuing a goal that is hard to attain seems to add meaning to the work involved, leading them to exert more effort.
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Does Intermunicipal Cooperation Increase Efficiency? A Conditional Metafrontier Approach for the Hessian Wastewater Sector
F. Blaeschke, Peter Haug
Local Government Studies,
No. 1,
2018
Abstract
This paper analyses the relationship between intermunicipal cooperation and efficiency of public service provision. Organisational arrangements of public service production, including self-provision, joint provision or contracting, affect incentives and internal transaction costs. Hence, cooperation gains from scale effects need to be balanced against technical inefficiencies. We analyse relative efficiency of wastewater disposal for German municipalities. We employ a conditional analysis in conjunction with a metafrontier approach to calculate relative efficiency measures and technology gap ratios controlling for organisational arrangements and further environmental variables. Jointly providing municipalities and contractor municipalities exhibit lower technical efficiency than self-providing and contracting municipalities. As confirmed by previous research, scale effects from cooperation and contracting apply to small municipalities primarily.
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Indirect Effects of Unfair Employer Behaviour on Workplace Performance
Matthias Heinz, Sabrina Jeworrek, Vanessa Mertins, Heiner Schumacher, Matthias Sutter
VOX CEPR's Policy Portal,
2017
Abstract
Any organisation that needs to restructure, cut wages, or make layoffs needs to know how the employees who are not affected will respond. This column presents a field experiment which revealed that the perception that employers are unfair – in this case, as a result of layoffs – reduces the performance of employees who have not been not directly affected. As part of the experiment, experienced HR managers were able to successfully anticipate the consequences of unfair employer behaviour on unaffected workers.
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Why is there Resistance to Works Councils in Germany? An Economic Perspective
Steffen Müller, Jens Stegmaier
Abstract
Recent empirical research generally finds evidence of positive economic effects of works councils, for example with regard to productivity and – with some limitations – to profits. This makes it necessary to explain why employers’ associations have reservations against works councils. On the basis of an in-depth literature analysis, we show that beyond the generally positive findings, there are important heterogeneities in the impact of works councils. We argue that those groups of employers that tend to benefit little from employee participation in terms of productivity and profits may well be important enough to shape the agenda of their employers’ organisation and even gained in importance within their organisations in recent years. We also discuss the role of deviations from profit-maximising behaviour like risk aversion, short-term profit maximisation, and other non-pecuniary motives, as possible reasons for employer resistance.
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