Wage Cyclicality Under Different Regimes of Industrial Relations. Issue 2 (18th March 2013)

• Record Type: Journal Article
• Authors: Gartner, Hermann; Schank, Thorsten; Schnabel, Claus
• Is Part Of: Industrial relations. Volume 52:Issue 2(2013:Apr.)
• Page Start: 516
• Page End: 540
• Publication Date: 2013-03-18
• Subjects: Industrial relations -- Periodicals; 331.05
• DOI: 10.1111/irel.12022
• Languages: English
• ISSNs: 0019-8676

Abstract

<abstract abstract-type="main" id="irel12022-abs-0001"> <title> <x xml:space="preserve">Abstract</x> </title> <p>We analyze the effect of collective wage agreements and of works councils on the cyclicality of real wages. Using employer–employee data for western Germany (1995–2004), we find that wage adjustments to positive and negative shocks are generally not symmetric. Wage growth increases in all industrial relations regimes when unemployment is falling, but this inverse relationship is weaker when unemployment is rising. Moreover, in plants with individual‐level bargaining, wages do not adjust at all to rising unemployment. Works councils increase wage growth only in firms covered by sectoral agreements, but they do not affect the cyclicality of wages.</p> </abstract>