Pay Clauses in Public Procurement: The Wage Impact of Collective Bargaining Compliance Laws in Germany

Vinzenz Pyka

Papers from arXiv.org

Abstract: Using administrative data from Germany, this study provides first evidence on the wage effects of collective bargaining compliance laws. These laws require establishments receiving public contracts to pay wages set by a representative collective agreement, even if they are not formally bound by one. Leveraging variation in the timing of law implementation across federal states, and focusing on the public transport sector -- where regulation is uniform and demand is driven solely by state-level needs -- I estimate dynamic treatment effects using event-study designs. The results indicate that within five years of the law's implementation, wage increases were on average 2.9\% to 4.6\% higher in federal states with such a law compared to those without one -- but only in East Germany. These findings highlight the potential for securing collectively agreed wages in times of declining collective bargaining coverage.

Date: 2025-07
References: Add references at CitEc
Citations:

Downloads: (external link)
http://arxiv.org/pdf/2507.01458 Latest version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2507.01458

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().