Collective Wage Agreements and Adjustments in German Services Firms

28 Pages Posted: 9 Nov 2003

See all articles by Ulrich Kaiser

Ulrich Kaiser

University of Southern Denmark - Faculty of Social Sciences; Center for Economic and Business Research (CEBR); Centre for European Economic Research

Friedhelm Pfeiffer

Centre for European Economic Research (ZEW); University of Mannheim - Department of Economics; IZA Institute of Labor Economics

Date Written: 2000

Abstract

There is a growing concern about collective wage agreement and employment dynamics in Germany. In this paper, evidence is provided on the way collective wage agreements affect the adjustment of working hours, employment and other production factors when firms from the service sector are faced with demand shocks. The estimation results indicate that collective wage agreements significantly influence firms' employment policies. Enrolments and the employment of free-lance collaborators are negatively affected while the probability of using short-term employment contracts as a reaction to demand shocks is positively influenced. No significant effect on the probability of dismissing workers has been found.

Keywords: collective wage agreements, demand fluctuations and adjustment costs, random effects ordered probit model, business-related services

JEL Classification: C33, J30, J50

Suggested Citation

Kaiser, Ulrich and Pfeiffer, Friedhelm, Collective Wage Agreements and Adjustments in German Services Firms (2000). ZEW Discussion Paper No. 00-33. Available at SSRN: https://ssrn.com/abstract=373922 or http://dx.doi.org/10.2139/ssrn.373922

Ulrich Kaiser (Contact Author)

University of Southern Denmark - Faculty of Social Sciences ( email )

Campusvej 55
DK-5230 Odense M
Denmark

HOME PAGE: http://www.sam.sdu.dk/staff/uka

Center for Economic and Business Research (CEBR) ( email )

Porcelaenshaven, Bldg 65
DK-2000 Frederiksberg
Denmark

HOME PAGE: http://www.cebr.dk/uk

Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1 D-68161 Mannheim
Germany

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

Friedhelm Pfeiffer

Centre for European Economic Research (ZEW) ( email )

D-68161 Mannheim
Germany
++49 (0)621/1235-150 (Phone)
++49 (0)621/1235-225 (Fax)

University of Mannheim - Department of Economics

D-68131 Mannheim
Germany

IZA Institute of Labor Economics

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

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