Indicative and Updated Estimates of the Collective Bargaining Premium in Germany

John Addison, Paulino Teixeira, Katalin Evers () and Lutz Bellmann ()
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Katalin Evers: Institute for Employment Research (IAB), Nuremberg
Lutz Bellmann: Institute for Employment Research (IAB), Nuremberg

No 7474, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This study provides updated evidence on the union contract differential in Germany using establishment-wide wage data and two estimation strategies. It provides pairwise estimates of the union differential based on separate samples of collective bargaining leavers and joiners vis-à-vis the corresponding counterfactual groups. It is reported that average wages increase by 3 to 3.5 percent after entering into a collective agreement and decrease by 3 to 4 percent after abandoning a collective agreement. Excluding establishments that experience mass layoffs little influences these net findings, although such establishments record wage losses – statistically insignificant for joiners but up to 10 percent in the case of leavers, as compared with the counterfactuals. The backdrop to these new indicative estimates, which are properly conditioned on establishment size and industry affiliation, inter al., is one of wage stagnation and continuing union decline.

Keywords: difference-in-differences; collective bargaining transitions; union contract premium; average wages; matching; Germany (search for similar items in EconPapers)
JEL-codes: J31 J51 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2013-06
New Economics Papers: this item is included in nep-lab, nep-lma and nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published - published in: Industrial Relations, 2014, 53 (1), 125-157.

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Journal Article: Indicative and Updated Estimates of the Collective Bargaining Premium in Germany (2014)
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