Industrial Relations and the Wage Differentials between Skilled and Unskilled Blue-Collar Workers within Establishments: An Empirical Analysis with Data of Manufacturing Firms

Olaf Hübler and Wolfgang Meyer ()
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Wolfgang Meyer: Leibniz University of Hannover

No 176, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Increased wage inequality between skilled and unskilled workers is a stylized fact, which can be observed in many developed countries. Among the explanations advanced for this phenomenon is the increasing globalization, a skill-biased technical progress, restructuring of the firms, and last but not least, a decreasing importance of industrial relations institutions. In the paper, we investigate in a three-step procedure with firms’ data whether the latter determinant is influential. We control for the other relevant explanations and split industrial relations into three components - coverage of collective bargaining, existence of a works council, and union density - within a four-equation model. We find an insignificant influence of the union density. A Works council compresses the wage differentials between skilled and unskilled blue-collar workers while coverage is effective in the opposite direction. The latter two effects nearly offset each other.

Keywords: union density; skilled and unskilled labour; Wage differentials; coverage of collective bargaining; works councils (search for similar items in EconPapers)
JEL-codes: J31 J51 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2000-07
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Citations: View citations in EconPapers (8)

Published - published in: Schmollers Jahrbuch: Zeitschrift für Wirtschafts- und Sozialwissenschaften /Journal of Applied Social Science Studies, 2001, 121(3), 285-312

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