Abstract for:

Wage Distributions by Bargaining Regime: Linked Employer-Employee Data Evidence from Germany

Karsten  Kohn,  Alexander C.  Lembcke,  July 2007
Paper No' CEPDP0813: | Full paper

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Keywords: Collective wage bargaining; wage structure, kernel density estimation, variance decomposition, wage equations, German Structure of Earnings Survey

JEL Classification: J31; J51; J52

Is hard copy/paper copy available? YES - Paper Copy Still In Print.

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This Paper is published under the following series: CEP Discussion Papers

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Abstract:

Using linked employer-employee data from the German Structure of Earnings Survey 2001, this paper provides a comprehensive picture of the wage structure in three wage-setting regimes prevalent in the German system of industrial relations. We analyze wage distributions for various labor market subgroups by means of kernel density estimation, variance decompositions, and individual and firm-level wage regressions. Unions’ impact through collective and firm-level bargaining mainly works towards a higher wage level and reduced overall and residual wage dispersion. Yet observed effects are considerably heterogeneous across different labor market groups. There is no clear evidence for wage floors formed by collectively bargained low wage brackets which would operate as minimum wages for different groups of workers.