Rent-sharing and Collective Bargaining Coverage: Evidence from Linked Employer-Employee Data

Nicole Guertzgen

Scandinavian Journal of Economics, 2009, vol. 111, issue 2, pages 323-349

Abstract: Using a linked employer-employee dataset, this paper analyses the relationship between firm profitability and wages. Particular emphasis is given to the question of whether the sensitivity of wages to firm-specific rents varies with collective bargaining coverage. To address this issue, we distinguish sector- and firm-specific wage agreements and wage determination without any bargaining coverage. Our findings indicate that individual wages are positively related to firm-specific quasi-rents in the non-union sector and under firm-specific contracts. Industry-wide wage contracts, however, are associated with a significantly lower responsiveness of wages to firm-level profitability. Copyright © The editors of the "Scandinavian Journal of Economics" 2009. .

Date: 2009

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