Does Institutional Diversity Account for Pay Rules in Germany and Belgium?

Stephan Kampelmann and Francois Rycx

No 6010, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper examines the relationship between institutions and the remuneration of different jobs by comparing the German and Belgian labour markets with respect to a typology of institutions (social representations, norms, conventions, legislation, and organisations). The observed institutional differences between the two countries lead to the hypotheses of (I) higher overall pay inequality in Germany; (II) higher pay inequalities between employees and workers in Belgium; and (III) higher (lower) impact of educational credentials (work-post tenure) on earnings in Germany. We provide survey-based empirical evidence supporting hypotheses I and III, but find no evidence for hypothesis II. These results underline the importance of institutional details: although Germany and Belgium belong to the same "variety of capitalism", we provide evidence that small institutional disparities within Continental-European capitalism account for distinct structures of pay.

Keywords: rules; wage inequality; labour market institutions; collective bargaining (search for similar items in EconPapers)
JEL-codes: J31 J51 J52 J53 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2011-10
New Economics Papers: this item is included in nep-bec, nep-eur, nep-lab and nep-lma
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Published - published in: Socio-Economic Review, 2013, 11 (1), 131-157

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https://docs.iza.org/dp6010.pdf (application/pdf)

Related works:
Working Paper: Does institutional diversity account for pay rules in Germany and Belgium? (2013)
Working Paper: Does institutional diversity account for pay rules in Germany and Belgium? (2011)
Working Paper: Does institutional diversity account for pay rules in Germany and Belgium? (2011)
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