Determinants of contract wages in Germany

This paper investigates the determinants of German pay-rise contracts which are collectively negotiated at the industry level. Key findings from data of seven industries are: first, the contracts are shaped by the German unions' neutrality doctrine which falsely asserts that contracts are neutr...

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Bibliographic Details
Published inEuropean economic review Vol. 34; no. 6; pp. 1233 - 1245
Main Authors Neumann, Manfred J.M., Schmidt, Roland, Schulte, Elisabeth
Format Journal Article
LanguageEnglish
Published Amsterdam, etc Elsevier B.V 01.09.1990
Elsevier
North Holland Publishing Company, etc
Elsevier Sequoia S.A
SeriesEuropean Economic Review
Subjects
Annual reports
Contracts
Economic models
Economic theory
Employment
Factors
Increases
Investigations
Labor contracts
Labor market
Labor negotiations
Real wages
Regression analysis
Studies
Wages & salaries
Germany
West Germany
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Summary:This paper investigates the determinants of German pay-rise contracts which are collectively negotiated at the industry level. Key findings from data of seven industries are: first, the contracts are shaped by the German unions' neutrality doctrine which falsely asserts that contracts are neutral towards employment, if they take full account of expected labour productivity growth and inflation. Second, the contracts are based on economy-wide rather than industry-specific productivity growth. The evidence suggests that the German labour market is dominated by cooperative solutions that are not neutral towards employment.
ISSN:0014-2921
1873-572X
DOI:10.1016/0014-2921(90)90077-C