Arbeitspapier

Tarifpolitik und Entgeltflexibilität in Ostdeutschland

The paper explores wage setting practice in East Germany since unification. It gathers evidence for the claim that economically non-viable collective agreements have fostered decentralized wage setting. First, we document declining organization rates of both employers and employees, allowing drift between collective and actual wages. Second, we examine macroeconomic wage flexibility by estimating a switching regime model, in which the observed distribution of individual wage changes is generated by simultaneous processes of union, nominal or no wage rigidity. The results indicate that wages become more flexible during transition. Furthermore nominal wage rigidity, typical for decentralized bargaining, is much more common in East than in West Germany, while the opposite holds regarding union wage rigidity.

Language
Englisch

Bibliographic citation
Series: IZA Discussion Papers ; No. 1871

Classification
Wirtschaft
Wage Level and Structure; Wage Differentials
Trade Unions: Objectives, Structure, and Effects
Comparative Studies of Particular Economies
Subject
wage rigidity
unions
East Germany

Event
Geistige Schöpfung
(who)
Bonin, Holger
Event
Veröffentlichung
(who)
Institute for the Study of Labor (IZA)
(where)
Bonn
(when)
2005

Handle
Last update
10.03.2025, 11:44 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Bonin, Holger
  • Institute for the Study of Labor (IZA)

Time of origin

  • 2005

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