German employment relations are characterized by a distinct dual system: First, working conditions and wages are determined by industry level collective bargaining agreements. Second, on the establishment level the works council is responsible for employer-employee negotiations. But since the...

In order to reduce unemployment, it is often recommended that industry-levelwage bargaining in Germany should be replaced by a more decentralized system.This paper provides a critical assessment of the current wage bargaininginstitutions and reexamines the case for a more decentralized system....

Collective bargaining in Germany takes place at either industry or firm level. Collective bargaining coverage is much higher than union density. The share of employees covered by collective bargaining in a single firm can vary between 0% and 100%. This institutional setup suggests that...

This paper investigates the increase in wage inequality, the decline in collective bargaining, and the development of the gender wage gap in West Germany between 2001 and 2006. Based on detailed linked employer-employee data, we show that wage inequality is rising strongly ﾖ driven not only by...