Affiliation:
1. Boris Hirsch is Professor of Economics at Leuphana University of Lüneburg and Research Fellow to Halle Institute for Economic Research (IWH) and IZA Institute of Labor Economics. Steffen Mueller is Head of the Department of Structural Change and Productivity at Halle Institute for Economic Research (IWH), Professor of Economics at University of Magdeburg, and Research Fellow to CESifo
Abstract
The authors use three distinct methods to investigate the influence of industrial relations on firm wage premia in Germany. First, ordinary least squares (OLS) regressions for the firm effects from a two-way fixed-effects decomposition of workers’ wages reveal that average premia are larger in firms bound by collective agreements and in firms with a works council, holding constant firm performance. Next, recentered influence function (RIF) regressions show that premia are less dispersed among covered firms but more dispersed among firms with a works council. Finally, in an Oaxaca–Blinder decomposition, the authors find that decreasing bargaining coverage is the only factor they consider that contributes to the marked rise in premia dispersion over time.
Subject
Management of Technology and Innovation,Organizational Behavior and Human Resource Management,Strategy and Management
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