Collective bargaining agreements with hardship or opening clauses and their consequences on wage flexibility and wage settlement

Germany’s high level of structural unemployment is often linked with the system of collective wage bargaining and its lack of supplying enough flexibility in today’s unstable times. But there has been only little empiric research about the using flexible elements and its implications. This project aims to identify the possibilities and the actual applications of flexible elements in the German wage bargaining system, as well as their impacts on wage structure and firm performance.

Using adequate microeconometric methods, we analyse whether a more flexible adaptation and differentiation of wages can help businesses to cope with heterogeneous labour markets. Our data base consists of the Linked-Employer-Employee-Dataset from the IAB and the German Structure of Earnings Survey (GSES) from German official statistics.

In the first two stages of the project, we projected a detailed survey of the existence and the design of opening clauses in collective bargaining agreements from 1991 to 2005 in the manufacturing sector in the German state of Baden-Wuerttemberg. On this basis, we then could perform a typification of the different bargaining agreements. Additionally, we analysed the impacts of collective binding and opening clauses on the wage structure, and the determinants for the introduction of opening clauses and their application on the firm level.

Currently, we looked into the development of collective bargaining coverage in Baden-Wuertemberg, using data from the IAB Establishment-Panel. In line with the ongoing criticism of the rigid collective bargaining agreements, collective bargaining coverage is in decline. The share of establishments under a collective bargaining agreement has fallen by 7 percentage points, down from 41 percent in 2000 to 34 percent in 2006. Above that, in the same year, about one quarter of all establishments bargained wages following the specifications of a collective agreement. So, the importance of collective bargaining agreements remains static.

On top, we survey the prevalence and usage of opening clauses within collective agreements in the manufacturing sector. A recent result records the existence of a huge lack of information on the side of the establishments, about one in five do not know about the existence of opening clauses in their bargaining agreements. Moreover, we can show that mostly low-productive establishments or establishments in an economic crisis adopt opening clauses.

Publications:

Articles in refereed Journals:

• Heinbach, Wolf Dieter/Schröpfer Stefanie (2007): Typisierung der Tarifvertragslandschaft. Eine Clusteranalyse der tariflichen Öffnungsklauseln. In: Jahrbücher für Nationalökonomie und Statistik, 227/3, S. 219-235.
• Heinbach, Wolf Dieter (2007): Wages in Wage-Setting Regimes with Opening Clauses. In: AStA – Wirtschafts- und Sozialstatistisches Archiv, 1, pp. 233–245.

Articles in non refereed Journals and Anthologies:

• Bechtel, Stephan/Heinbach, Wolf Dieter/Strotmann, Harald (2006): Tarifbindung, betriebliche Lohnhöhe und Lohnstreuung im Produzierenden Gewerbe Baden-Württembergs. In: Forschungsdatenzentrum der Statistischen Landesämter (Hrsg.), Amtliche Mikrodaten für die Sozial- und Wirtschaftswissenschaften, Beiträge zu den Nutzerkonferenzen des FDZ der Statistischen Landesämter 2005, pp. 159 - 178.
• Heinbach, Wolf Dieter (2005): Ausmaß und Grad der tarifvertraglichen Öffnung. In: IAW-Report 2/2005, pp. 51 – 70.
• Heinbach, Wolf Dieter (2006): Immer mehr Tarifverträge sehen Öffnungsklauseln vor. In: Statistisches Monatsheft Baden-Württemberg, 11/2006, pp. 44-47.

Discussion Papers:

• Heinbach, Wolf Dieter/Spindler Markus (2007): To Bind or Not To Bind Collectively? Decomposition of Bargained Wage Differences Using Counterfactual Distributions. IAW Discussion Paper Nr. 36, [PDF: 1,0 MB] IAW Tübingen.
• Heinbach, Wolf Dieter/Schröpfer, Stefanie (2007): What a Difference Trade Makes. Export Activity and the Flexibility of Collective Bargaining Agreements. IAW Discussion Paper Nr. 35, [PDF: 289 KB] IAW Tübingen.
• Heinbach, Wolf Dieter/Schröpfer, Stefanie (2007): Typisierung der Tarifvertragslandschaft. Eine Clusteranalyse der tariflichen Öffnungsklauseln. IAW Discussion Paper Nr. 28, [PDF: 442 KB] IAW Tübingen.
• Heinbach, Wolf Dieter (2006): Bargained Wages in Decentralized Wage Setting Systems. IAW Discussion Paper Nr. 26, [PDF: 344 KB] IAW Tübingen.
• Heinbach, Wolf Dieter (2005): Impact of Opening Clauses on Bargained Wages, IAW Discussion Paper Nr. 22, [PDF: 911 KB] IAW Tübingen.

Master Thesis:

• Schröpfer, Stefanie (2007): Exporttätigkeit von Unternehmen und betriebliche Flexibilisierung tarifvertraglicher Lohnsetzung. Diploma thesis, Faculty of Economics and Business Administration, Eberhard Karls University Tübingen.
• Spindler, Markus (2007): Determinanten der Einführung von tariflichen Öffnungsklauseln – Eine empirische Analyse mit Hilfe von Panel-Logit und Panel-Probit-Modellen. Diploma thesis, Faculty of Business, Economics and Social Sciences, University of Hohenheim.