Trade Exposure and the Decline in Collective Bargaining: Evidence from Germany

Baumgarten, Daniel; Lehwald, Sybille

doi:10.2139/ssrn.3426942

Cited by 4 publications

(3 citation statements)

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“…43 Our findings are also consistent with other work showing that German firms tend to upgrade labor through investment in skills (Battisti et al, 2017;Dauth et al, 2017). 44 These responses may reflect the institutional environment, 43 Baumgarten and Lehwald (2019) provide evidence for the threat of import competition. 44 We find few switches of occupations to be systematically associated with large losses, even if we fill intermittent spells of non-employment.…”

Section: Discussionmentioning

confidence: 99%

Occupation Growth, Skill Prices, and Wage Inequality

Böhm¹,

Gaudecker²,

Schran³

2024

Journal of Labor Economics

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Any opinions expressed in this paper are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but IZA takes no institutional policy positions. The IZA research network is committed to the IZA Guiding Principles of Research Integrity. The IZA Institute of Labor Economics is an independent economic research institute that conducts research in labor economics and offers evidence-based policy advice on labor market issues. Supported by the Deutsche Post Foundation, IZA runs the world's largest network of economists, whose research aims to provide answers to the global labor market challenges of our time. Our key objective is to build bridges between academic research, policymakers and society. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.

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Section: Discussionmentioning

confidence: 99%

Occupation Growth, Skill Prices, and Wage Inequality

Böhm¹,

Gaudecker²,

Schran³

2024

Journal of Labor Economics

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“…Carluccio et al (2016), using French firm-level data, show that export shocks increase the probability that a collective wage agreement is reached, whereas import shocks have the opposite effect. Baumgarten and Lehwald (2019) find that greater import exposure decreases the probability that German plants participate in industry-wide bargaining agreements.…”

Section: Introductionmentioning

confidence: 81%

Labor Unions and the Electoral Consequences of Trade Liberalization

Ogeda,

Ornelas,

Soares

2024

Journal of the European Economic Association

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We show that the Brazilian trade liberalization in the early 1990s led to a permanent relative decline in the vote share of left-wing presidential candidates in the regions more affected by the tariff cuts. This happened even though the shock, implemented by a right-wing party, induced a contraction in manufacturing and formal employment in the more affected regions, and despite the left’s identification with protectionist policies. To rationalize this response, we consider a new institutional channel for the political effects of trade shocks: the weakening of labor unions. We provide support for this mechanism in two steps. First, we show that union presence—proxied by the number of workers directly employed by unions, by union density, and by the number of union establishments—declined in regions that became more exposed to foreign competition. Second, we show that the negative effect of tariff reductions on the votes for the left was driven exclusively by political parties with historical links to unions. Furthermore, the impact of the trade liberalization on the vote share of these parties was significant only in regions that had unions operating before the reform. These findings are consistent with the hypothesis that tariff cuts reduced the vote share of the left partly through the weakening of labor unions. This institutional channel is fundamentally different from the individual-level responses, motivated by economic or identity concerns, that have been considered in the literature.

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“…‘We have to deliver on terms that are brutally forced upon us’ ( Spiegel , 13 March 1995: 105), 6 was a typical statement in that context. Increased import competition by Chinese and Eastern European firms exposed smaller, less productive companies to further cost pressure (Baumgarten and Lehwald, 2019).…”

Section: The Cumulation Of Shocks In the 1990smentioning

confidence: 99%

Why does Germany abstain from statutory bargaining extensions? Explaining the exceptional German erosion of collective wage bargaining

Günther

Höpner

2022

Economic and Industrial Democracy

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Against the European trend, German statutory collective bargaining extensions (SBEs) have decreased in the last two decades, contributing to the exceptional erosion of German wage-bargaining coverage. This article distinguishes between two liberalization dynamics: an intrasectoral dynamic that started with the introduction of employers’ association memberships outside the scope of collective agreements, and an intersectoral dynamic. The latter is the result of an abnormal German institutional feature, the veto power of the employers’ umbrella association in the committees that have to approve SBE applications. Activation of this veto enabled employers to promote collective bargaining erosion in sectors other than their own, in order to contain cost pressures. This intersectoral liberalization dynamic has been part of Germany’s transition into an asymmetrically export-driven growth regime and could be stopped by means of political reforms.

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Trade Exposure and the Decline in Collective Bargaining: Evidence from Germany

Cited by 4 publications

References 46 publications

Occupation Growth, Skill Prices, and Wage Inequality

Occupation Growth, Skill Prices, and Wage Inequality

Labor Unions and the Electoral Consequences of Trade Liberalization

Why does Germany abstain from statutory bargaining extensions? Explaining the exceptional German erosion of collective wage bargaining

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