Let's Take Bargaining Models Seriously: The Decline in Union Power in Germany, 1992-2009

Boris Hirsch () and Claus Schnabel
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Boris Hirsch: Leuphana University Lüneburg

No 5875, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Building on the right-to-manage model of collective bargaining, this paper tries to infer union power from the observed results in wage setting. It derives a time-varying indicator of union strength and confronts it with annual data for Germany. The results show that union power was relatively stable in the 1990s but fell substantially (by almost one-third) from 1999 to 2007. Two-thirds of this fall in union power follow from the reduction in the labour share relative to the capital share whereas changes in the gap between the net wage and the income when unemployed account for the remaining third.

Keywords: Germany; trade union power; wage bargaining; labour share (search for similar items in EconPapers)
JEL-codes: J50 J51 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2011-07
New Economics Papers: this item is included in nep-bec, nep-eec and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Published - substantially revised version published as 'What Can We Learn from Bargaining Models about Union Power? The Decline in Union Power in Germany, 1992-2009' in: Manchester School, 2014, 82 (3), 347-362

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Related works:
Working Paper: Let's take bargaining models seriously: The decline in union power in Germany, 1992 - 2009 (2011)
Working Paper: Let's take bargaining models seriously: The decline in union power in Germany, 1992 - 2009 (2011)
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