Collective bargaining coverage, works councils and the new German minimum wage

authored by: Lutz Bellmann, Mario Bossler, Hans Dieter Gerner, Olaf Hübler
Abstract: This article assesses the role of the recent introduction of the minimum wage for collective bargaining coverage and works councils in Germany. The new minimum wage was initiated to strengthen German tariff autonomy, but effects on collective bargaining coverage are theoretically ambivalent. Using the IAB Establishment Panel, descriptive regressions show that firms covered by a collective bargaining contract are much less likely affected by the minimum wage. To construct a counterfactual for the group of affected establishments, the authors apply an entropy balancing procedure. Subsequent difference-in-differences estimates reveal a slight decline in collective bargaining participation, which falls short of statistical significance. Although the effect on opting into collective bargaining is even slightly positive, the authors observe a significant decrease in coverage through firms that exit collective agreements.
Organisation(s): Faculty of Economics and Management
External Organisation(s): Friedrich-Alexander-Universität Erlangen-Nürnberg (FAU Erlangen-Nürnberg)
Labour and Socio-Economic Research Centre (LASER)
Nuremberg Institute of Technology
IAB-Regional Berlin-Brandenburg
Type: Article
Journal: Economic and industrial democracy
Volume: 42
Pages: 269-288
No. of pages: 20
ISSN: 0143-831X
Publication date: 05.2021
Publication status: Published
Peer reviewed: Yes
ASJC Scopus subject areas: General Business,Management and Accounting, Strategy and Management, Organizational Behavior and Human Resource Management, Management of Technology and Innovation
Sustainable Development Goals: SDG 8 - Decent Work and Economic Growth, SDG 9 - Industry, Innovation, and Infrastructure
Electronic version(s): https://doi.org/10.1177/0143831X18762304 (Access: Closed)
https://doi.org/10.15488/11607 (Access: Open)