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Rent-sharing and collective wage contracts - evidence from German establishment-level data

[journal article]

Guertzgen, Nicole

Abstract

Using German establishment-level data, this paper analyses whether wages respond to firm-specific profitability conditions. Particular emphasis is given to the question of whether the extent of rent-sharing varies with collective bargaining coverage. In this context, two conflicting hypotheses a... view more

Using German establishment-level data, this paper analyses whether wages respond to firm-specific profitability conditions. Particular emphasis is given to the question of whether the extent of rent-sharing varies with collective bargaining coverage. In this context, two conflicting hypotheses are tested. The first one asserts that unions exploit their bargaining power at the firm-level and appropriate a larger share of rents than the bargaining parties in uncovered firms. The second one states that unions favour a compressed intra-industry wage structure and suppress the responsiveness of wages to firm-specific profitability conditions.\ The empirical analysis provides strong support for the second hypothesis. While pooled OLS estimates yield positive estimates of the rent-sharing coefficient in covered establishments, dynamic panel data estimates accounting for unobserved heterogeneity and the endogeneity of rents point to a rent-sharing coefficient of zero.... view less

Classification
Income Policy, Property Policy, Wage Policy

Document language
English

Publication Year
2009

Page/Pages
p. 2835-2854

Journal
Applied Economics, 42 (2009) 22

DOI
https://doi.org/10.1080/00036840801964708

Status
Postprint; peer reviewed

Licence
PEER Licence Agreement (applicable only to documents from PEER project)


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© 2007 - 2025 Social Science Open Access Repository (SSOAR).
Based on DSpace, Copyright (c) 2002-2022, DuraSpace. All rights reserved.