We Want Them All Covered! Collective Bargaining and Firm Heterogeneity: Theory and Evidence from Germany

• Autores: Florian Baumann, Tobias Brändle
• Localización: British journal of industrial relations, ISSN 0007-1080, Vol. 55, Nº. 3, 2017, págs. 463-499
• Idioma: inglés
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• Resumen

  • This article establishes a link between the degree of productivity dispersion within an industry and collective bargaining coverage of the firms in the industry. In a stylized unionized oligopoly model, we show that differences in productivity levels can affect the design of collective wage contracts a sector-union offers to heterogeneous firms. Using German linked employer–employee data, we test a range of our theoretical hypotheses and find empirical support for them. The dispersion of sector-level labour productivity decreases the likelihood of firms being covered by a collective bargaining agreement on the industry level, but increases the likelihood of firms being covered by firm-level agreements. The results hold for different subsamples and (panel) estimation techniques.