Paying more than necessary? The wage cushion in Germany

Jung S, Schnabel C (2011)

Publication Type: Journal article

Publication year: 2011

Journal

Labour Blackwell Publishing Inc.

Publisher: Blackwell Publishing Inc.

Book Volume: 25

Pages Range: 182-197

Journal Issue: 2

Abstract

In Germany, more than 40 per cent of plants covered by collective agreements pay wages above the level stipulated in the agreement, giving rise to a wage cushion between actual and contractual wages. Cross-sectional and fixed-effects estimations indicate that the wage cushion mainly varies with the profit situation of the plant and with indicators of labour shortage and the business cycle. Whereas plants bound by multi-employer agreements seem to pay wage premiums in order to overcome the restrictions imposed by the rather centralized bargaining system in (western) Germany, plants that use single-employer agreements are significantly less likely to have wage cushions. © 2011 CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd.

Authors with CRIS profile

Sven Jung Lehrstuhl für Volkswirtschaftslehre, insbesondere Arbeitsmarkt- und Regionalpolitik Claus Schnabel Lehrstuhl für Volkswirtschaftslehre, insbesondere Arbeitsmarkt- und Regionalpolitik

Related research project(s)

Löhne und Lohndifferenziale Jan. 1, 2000 - Jan. 1, 2003

How to cite

APA:

Jung, S., & Schnabel, C. (2011). Paying more than necessary? The wage cushion in Germany. Labour, 25(2), 182-197.

MLA:

Jung, Sven, and Claus Schnabel. "Paying more than necessary? The wage cushion in Germany." Labour 25.2 (2011): 182-197.

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