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Wage effects of works councils and opening clauses: the German case

[journal article]

Ellguth, Peter; Gerner, Hans-Dieter; Stegmaier, Jens

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Please use the following Persistent Identifier (PID) to cite this document:http://dx.doi.org/10.1177/0143831X12463171

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Abstract "German employment relations are characterized by a distinct dual system. First, working conditions and wages are determined by industry-level collective bargaining agreements. Second, on the establishment-level, the works council is responsible for employer - employee negotiations. However, since the mid-1980s, an increasing number of areas of regulation have been transferred from the industry- to the establishment-level using so-called opening clauses. The analysis in this article relies on rich German establishment data and reveals new insights into the institutional machinery of wage bargaining. While the existence of such clauses is related to higher wages, their application results in wage cuts of roughly the same size. The results also suggest that works councils, on average, are able to prevent the negative wage effects of opening clauses." (Author's abstract, IAB-Doku) ((en))
Keywords collective agreement; flexibility; income effect; collective bargaining; institutional factors; decentralization; employment agreement; panel; works council; Federal Republic of Germany; industrial relations
Classification Sociology of Work, Industrial Sociology, Industrial Relations
Document language English
Publication Year 2014
Page/Pages p. 95-113
Journal Economic and Industrial Democracy, 35 (2014) 1
ISSN 0143-831X
Status Published Version; peer reviewed
Licence Deposit Licence - No Redistribution, No Modifications
This publication is with permission of the rights owner freely accessible due to an Alliance licence and a national licence (funded by the DFG, German Research Foundation) respectively.