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

[journal article]

Ellguth, Peter
Gerner, Hans-Dieter
Stegmaier, Jens

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 t... view more

"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))... view less

Keywords
institutional factors; industrial relations; collective agreement; panel; employment agreement; Federal Republic of Germany; decentralization; works council; income effect; collective bargaining; flexibility

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

With the permission of the rights owner, this publication is under open access due to a (DFG-/German Research Foundation-funded) national or Alliance license.


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