Wage Cyclicality under Different Regimes of Industrial Relations

Hermann Gartner, Thorsten Schank and Claus Schnabel

No 5228, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Since there is scant evidence on the role of industrial relations in wage cyclicality, this paper analyzes the effect of collective wage contracts and of works councils on real wage growth. Using linked employer-employee data for western Germany, we find that works councils affect wage growth only in combination with collective bargaining. Wage adjustments to positive and negative economic shocks are not always symmetric. Only under sectoral bargaining there is a (nearly symmetric) reaction to rising and falling unemployment. In contrast, wage growth in establishments without collective bargaining adjusts only to falling unemployment and is unaffected by rising unemployment.

Keywords: wage cyclicality; wage bargaining; works council; Germany (search for similar items in EconPapers)
JEL-codes: E32 J31 J53 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2010-10
New Economics Papers: this item is included in nep-bec and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Published - published in: Industrial Relations, 2013, 52 (2), 516-540

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Related works:
Journal Article: Wage Cyclicality Under Different Regimes of Industrial Relations (2013)
Working Paper: Wage cyclicality under different regimes of industrial relations (2010)
Working Paper: Wage cyclicality under different regimes of industrial relations (2010)
Working Paper: Wage cyclicality under different regimes of industrial relations (2010)
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