Browsing by Subject "Lohnbildung"

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Bargained wages in decentralized wage-setting regimes
(2006) Heinbach, Wolf Dieter
Collective wage agreements still play an important role in the German wage bargaining system. However, there is a critical debate in Germany whether collective agreements deliver the flexibility needed by firms to adjust to the needs of international competition and technological change. In recent years, the social partners in some industries have responded to this possible lack of flexibility by introducing so called opening clauses into their collective bargaining agreements. These allow firms to deviate from their collective agreement under certain conditions. The aim of this paper is to empirically analyze the prevalence of opening clauses in the German manufacturing sector and their impact on the wage structure. To provide a basis for the empirical analyses, a survey on the existence and intensity of opening clauses in central collective agreements has been conducted. Thereby, these sectoral data about opening clauses are exactly combined with those from the German Structure of Earnings Survey 1995 and 2001, a linked employer-employee dataset from German official statistics. The results show the number of collective bargaining agreements containing opening clauses increasing remarkably since 1991. Furthermore, the implementation of opening clauses into collective contracts creates significant effects on wages.
Essays on the impact of temporary agency work on wages and employment
(2018) Baudy, Philipp; Beißinger, Thomas
The thesis contributes to the theoretical discussion of the effects of temporary agency work and picks up three different issues that have not been analyzed yet. It provides three theoretical models 1) to discuss the optimal economic behavior of firms and labor unions when firms threaten to use temporary agency employment in the bargaining process, 2) to examine the macroeconomic effects of the deregulation of temporary agency work that took, and still takes, place in many countries in the last decades, and 3) to study how the technological choice of firms in the economy changes due to the legal deregulation of temporary agency work. The first model focuses on the question of the optimal economic behavior of the bargaining parties. Developing a monopoly union model, it analyzes how and to what extent firms can strategically use the threat of temporary agency employment to dampen the wage claims of labor unions. Furthermore, the model discusses how labor unions optimally behave and respond to these threats. It is shown that labor unions may find it optimal to accept lower wages to prevent firms from using temporary agency workers. The decision of the labor union to oppose or accept the firms threat is based on the attempt to minimize the loss in its utility. While labor unions suffer from the potential use of temporary agency employment in terms of their utility, firms gain from increasing profits and an extended employment level per firm. If unions do not oppose temporary agency work, the model suggests that labor unions increase their wage claims for the remaining regular workers to a level that even exceeds the claims of the labor union if there is no threat at all. Hence, an intensive use of temporary agency workers in high-wage firms may be the cause and not the consequence of the high wage level in those firms. The second model concentrates on the effects of the deregulation of temporary agency employment on macroeconomic determinants like wages, unemployment, and the employment structure. Using the matching framework, it provides a first contribution that combines labor unions and temporary agency work in this modeling setup. Large firms produce differentiated goods employing regular workers that are organized in labor unions and, optionally, using temporary agency work for parts of the production. Furthermore, there is a special emphasis on the flows from temporary agency to regular employment, which is modeled as on-the-job search. The model shows that the deregulation of temporary agency work leads to a reduction in overall unemployment. Surprisingly, this favors regular employment due to lower wages that arise from the impact that the more attractive production alternative temporary agency employment has on labor union wage bargaining. The most interesting finding, however, is that there is a hump-shaped relationship between the degree of institutional deregulation of temporary agency work and its rate of employment. This is explained by the fact that voluntary non-institutional, firm-level regulations come into play and get the more important, the less regulated temporary agency employment is. They have a counter-effect on the costs of temporary agency work that is lowered by the deregulation. Additionally, even if the model does not conceal that individual workers suffer from declining wages, it shows that regular employment benefits from the deregulation of temporary agency employment. The third model examines how the technological choice of firms in an economy changes due to the availability of temporary agency employment as a production alternative that gets cheaper and, therefore, more attractive the less regulated it is. The model uses the matching framework with two types of jobs that differ in their productivity and workers that are randomly matched with temporary or regular job vacancies. The analysis reveals how the decision of firms with which technology to enter the market and to produce with changes with the deregulation of temporary agency employment. Regular and temporary agency workers produce the same good but use different technologies. Temporary agency work is less expensive to hire than regular workers as direct labor costs are lower. However, job destruction and labor turnover is higher in this employment type. The model rather intuitively suggests that the legal deregulation of temporary agency employment deteriorates the technology level used in the economy, leads to a more intensive use of the less advanced technology, and increases temporary agency employment. Regular workers are shown to suffer from declining wages while the labor income of temporary agency workers increases. However, the model also provides an advice for economic policy by suggesting that subsidies or other forms of support for directed investments in technological progress of more advanced technologies may be suitable to dampen the macroeconomic effects of the deregulation of temporary agency employment.
Fairness considerations in labor union wage setting : a theoretical analysis
(2012) Strifler, Matthias; Beißinger, Thomas
We consider a theoretical model in which unions not only take the outside option into account, but also base their wage-setting decisions on an internal reference, called the fairness reference. Wage and employment outcomes and the shape of the aggregate wagesetting curve depend on the weight and the size of the fairness reference relative to the outside option. If the fairness reference is relatively high compared to the outside option, higher wages and lower employment than in the standard model will prevail. If hit by an adverse technology shock, the economy will then react with a stronger downward adjustment in employment, whereas real wages are more rigid than in the standard model. With a low fairness reference the opposite results are obtained. An increase in the fairness weight amplifies the deviations of wages and employment from those of the standard model. It also leads to an increase in the degree of real wage rigidity if the fairness reference is high and an increase in the degree of real wage flexibility if the fairness reference is low. Thus, higher wages go hand in hand with more pronounced wage stickiness.
Four essays on the impact of institutions, technological change, and globalization on labor market outcomes
(2019) Cords, Dario; Beißinger, Thomas
The thesis picks up some modern labor market phenomena and contributes to the literature by developing four theoretical models to analyze the effects on labor market outcomes. In particular, it 1) examines how the decision of labor unions to merge or to stay independent depends on the degree of product differentiation, 2) investigates the macroeconomic effects of the deregulation of temporary agency employment, 3) discusses if low-skilled workers will be substituted by automation, and 4) studies how the technological choice of firms in an economy changes due to low-skilled immigration. The first model focuses on the question of the optimal economic behavior of labor unions under multi-unionism. Developing a right-to-manage model, it analyzes how the decision of labor unions to merge or to stay independent depends on the degree of product differentiation. The model predicts that labor unions have strict incentives to merge if the products are substitutable in consumption, while they want to stay separated for complementary products. The second model studies the effects of the deregulation of temporary agency employment on labor market outcomes such as wages, unemployment, and the employment structure. It develops a search and matching model with large firms that produce differentiated goods using regularly employed workers that are organized in labor unions and, in addition, temporary agency workers that may search on-the-job for regular employment. The model shows that the legal deregulation of temporary agency employment increases overall employment and the rate of regular employment. The rate of regular employment increases, since labor unions reduce their wage claims in response to the deregulation of temporary agency employment. As the most surprising result, the model predicts a hump-shaped relationship between the degree of legal deregulation of temporary agency employment and its employment rate. This is explained by voluntary, non-institutional firm-level agreements that restrict the use of temporary agency employment in the production and get more important, the more deregulated temporary agency employment is. The third model incorporates automation in the search and matching framework to reveal if automation creates technological, skill-specific unemployment. The model assumes one-worker firms that operate in a low- or high-skill intensive intermediate sector and employ low- or high-skilled workers, respectively. The two intermediate goods, traditional capital and automation capital in form of industrial robots, 3D printer etc. are used for the production of a final good. Automation capital serves as a perfect substitute for low-skilled labor and an imperfect substitute for high-skilled labor. The model shows that the accumulation of automation capital leads to the creation of technological unemployment. While the unemployment rate of high-skilled workers decreases, low-skilled workers suffer and get replaced by automation capital. Further, the model predicts that wage inequality between high- and low-skilled workers rises as the wage rate of low-skilled workers declines, while the wage rate of high-skilled workers increases. The fourth model examines how the technological choice of firms in a host country change due to an exogenous inflow of low-skilled immigrants. It uses a search and matching model that considers two type of firms that either use a basic technology or a more advanced technology. Workers match with vacancies randomly and consist of three groups: low- and high-skilled natives and low-skilled immigrants. While the skill distribution of workers is exogenous, firms may endogenously adjust their skill requirements. Another feature of the model is that it captures educational mismatch of high-skilled natives. The model rather intuitively suggests that an increase in low-skilled immigration causes firms to change their behavior and to shift their production towards the basic technology. As a consequence, low-skilled natives benefit from the influx of low-skilled immigrants, while the wage rate of high-skilled natives decreases, whereas their employment rate goes up.
Technical change, task allocation, and labor unions
(2022) Marczak, Martyna; Beißinger, Thomas; Brall, Franziska
We propose a novel framework that integrates the task approach" for a more precise production modeling into the search-and-matching model with low- and high-skilled workers, and wage setting by labor unions. We establish the relationship between task reallocation and changes in wage pressure, and examine how skill- biased technical change (SBTC) affects the task composition, wages of both skill groups, and unemployment. In contrast to the canonical model with a fixed task allocation, low-skilled workers may be harmed in terms of either lower wages or higher unemployment depending on the relative task-related productivity profile of both worker types. We calibrate the model to the US and German data for the periods 1995-2005 and 2010-2017. The simulated effects of SBTC on low-skilled unemployment are largely consistent with observed developments. For example, US low-skilled unemployment increases due to SBTC in the earlier period and decreases after 2010.