The Institutional Context of an 'Empirical Law': The Wage Curve under Different Regimes of Collective Bargaining
Blien U, Dauth W, Schank T, Schnabel C (2013)
Publication Language: English
Publication Type: Journal article, Original article
Publication year: 2013
Journal
Publisher: Wiley-Blackwell: No OnlineOpen
Book Volume: 51
Pages Range: 59-79
Journal Issue: 1
Abstract
The wage curve postulates that the wage level is a decreasing function of the regional unemployment rate. In testing this hypothesis, most studies have not taken into account that differences in the institutional framework may have an impact on the existence (or the slope) of a wage curve. Using a large-scale linked employer-employee dataset for Western Germany, this article provides a first direct test of the relevance of different bargaining regimes (and of works councils) for the existence of a wage curve. In pooled regressions for the period 1998 to 2006, as well as in worker-level or plant-level fixed-effects estimations, we obtain evidence for a wage curve for plants with a collective bargaining agreement at firm level. The point estimates for this group of plants are close to the -0.1 elasticity of wages with respect to unemployment postulated by Blanchflower and Oswald. In this regime, we also find that works councils dampen the adjustment of wages to the regional unemployment situation. In the other regimes of plants that either do not make use of collective contracts or apply sectoral agreements, we do not find a wage curve. © 2011 Blackwell Publishing Ltd/London School of Economics.
Authors with CRIS profile
Wolfgang Dauth
Lehrstuhl für Statistik und empirische Wirtschaftsforschung
Claus Schnabel
Lehrstuhl für Volkswirtschaftslehre, insbesondere Arbeitsmarkt- und Regionalpolitik
Related research project(s)
Involved external institutions
Institut für Arbeitsmarkt- und Berufsforschung (IAB) der Bundesagentur für Arbeit (BA)
Germany (DE)
Johannes Gutenberg-Universität Mainz (JGU)
Germany (DE)
Germany (DE)
Johannes Gutenberg-Universität Mainz (JGU)
Germany (DE)
How to cite
APA:
Blien, U., Dauth, W., Schank, T., & Schnabel, C. (2013). The Institutional Context of an 'Empirical Law': The Wage Curve under Different Regimes of Collective Bargaining. British Journal of Industrial Relations, 51(1), 59-79.
MLA:
Blien, Uwe, et al. "The Institutional Context of an 'Empirical Law': The Wage Curve under Different Regimes of Collective Bargaining." British Journal of Industrial Relations 51.1 (2013): 59-79.
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