A Sequential Decomposition of the Drop in Collective Bargaining Coverage

46 Pages Posted: 22 Jun 2015

See all articles by Bernd Fitzenberger

Bernd Fitzenberger

Humboldt University of Berlin - School of Business and Economics

Katrin Sommerfeld

Centre for European Economic Research (ZEW), Department Labour Markets, Human Resources and Social Policy; IZA Institute of Labor Economics

Date Written: June 8, 2015

Abstract

Union representation has been in strong decline in most OECD countries with potentially important consequences for wages. What drives this decline? We try to answer this question by developing and implementing a detailed decomposition approach based on Fairlie (2005). Using linked employer-employee data from the German Structure of Earnings Survey for 2001 and 2006, we document a sharp drop in collective bargaining coverage that amounts to 17 percentage points for males and 20 percentage points for females in West, and eight and 14 percentage points, respectively, in East Germany. We find that neither changes in the characteristics nor changes in the coefficients associated with the characteristics as a whole provide an explanation for the drop in collective bargaining coverage. The drop in coverage is the result of an unexplained time trend.

Keywords: Collective bargaining, unions, sequential decomposition

JEL Classification: C21, J51, J52

Suggested Citation

Fitzenberger, Bernd and Sommerfeld, Katrin, A Sequential Decomposition of the Drop in Collective Bargaining Coverage (June 8, 2015). ZEW - Centre for European Economic Research Discussion Paper No. 15-039, Available at SSRN: https://ssrn.com/abstract=2621396 or http://dx.doi.org/10.2139/ssrn.2621396

Bernd Fitzenberger (Contact Author)

Humboldt University of Berlin - School of Business and Economics ( email )

Spandauer Str. 1
Berlin, D-10099
Germany

Katrin Sommerfeld

Centre for European Economic Research (ZEW), Department Labour Markets, Human Resources and Social Policy ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim
Germany

HOME PAGE: http://www.zew.de/en/mitarbeiter/mitarbeiter.php3?action=mita&kurz=kso

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
41
Abstract Views
677
PlumX Metrics