Organised Labour, Labour Market Imperfections, and Employer Wage Premia
Sabien Dobbelaere, Boris Hirsch, Steffen Müller, Georg Neuschäffer
IWH Discussion Papers,
No. 20,
2022
Abstract
This paper examines how collective bargaining through unions and workplace codetermination through works councils shape labour market imperfections and how labour market imperfections matter for employer wage premia. Based on representative German plant data for the years 1999–2016, we document that employer monopsony involving below competitive wages is far more prevalent than the contrary worker monopoly. We further find a smaller prevalence and intensity of employer monopsony when unions or works councils are present and the opposite for worker monopoly. Finally, we document a close link between labour market imperfections and employer wage premia. The presence and intensity of employer monopsony are associated with a lower level and larger dispersion of premia, whereas more intense worker monopoly is accompanied by a higher level only.
Read article
Fallende Lohnquoten: Die Rolle von Technologie und Marktmacht
Matthias Mertens
Wirtschaft im Wandel,
No. 2,
2022
Abstract
Die Lohnquote, definiert als die Summe der Arbeitnehmerentgelte geteilt durch die Gesamtproduktion einer Volkswirtschaft, ist in den letzten 40 Jahren in vielen Ländern gefallen. Das Fallen der Lohnquote besitzt potenziell weitreichende Implikationen für das Ausmaß an Ungleichheit und für den Wohlstand von Arbeitnehmerinnen und Arbeitnehmern. Daneben kann eine fallende Lohnquote auch ein Anzeichen für einen Anstieg der Firmenmarktmacht sein. Anhand von Mikrodaten zum deutschen Verarbeitenden Gewerbe untersucht dieser Artikel, welche Rolle technologischer Wandel und steigende Firmenmarktmacht als Ursachen für das Fallen der Lohnquote spielen. Es zeigt sich, dass technologischer Wandel und ein Anstieg der Firmenmarktmacht, insbesondere auf Arbeitsmärkten, jeweils die Hälfte der fallenden Lohnquote im deutschen Verarbeitenden Gewerbe erklären. Daher können politische Maßnahmen, die Firmenmarktmacht reduzieren, nicht nur eine effizienzsteigernde Wirkung entfalten, sondern, als ein Nebeneffekt, auch den Anteil der Löhne an der Gesamtproduktion erhöhen.
Read article
IWH Bankruptcy Research
IWH Bankruptcy Research The Bankruptcy Research Unit of the Halle Institute for...
See page
Alumni
IWH Alumni The IWH would like to stay in contact with its former employees. We...
See page
Productivity
Productivity: More with Less by Better Available resources are scarce. To sustain our...
See page
Micro-mechanisms behind Declining Labor Shares: Rising Market Power and Changing Modes of Production
Matthias Mertens
International Journal of Industrial Organization,
March
2022
Abstract
I derive a micro-founded framework showing how rising firm market power on product and labor markets and falling aggregate labor output elasticities provide three competing explanations for falling labor shares. I apply my framework to 20 years of German manufacturing sector micro data containing firm-specific price information to study these three distinct drivers of declining labor shares. I document a severe increase in firms’ labor market power, whereas firms’ product market power stayed comparably low. Changes in firm market power and a falling aggregate labor output elasticity each account for one half of the decline in labor's share.
Read article
Demographic Change
Demographic Change Dossier ...
See page
“The Good News about Bad News”: Information about Past Organizational Failure and Its Impact on Worker Productivity
Sabrina Jeworrek, Vanessa Mertins, Michael Vlassopoulos
Leadership Quarterly,
No. 3,
2021
Abstract
Failure in organizations is very common. Little is known about whether leaders should provide information about past organizational failure to followers and how this might affect their future performance. We conducted a field experiment in which we recruited temporary workers to carry out a phone campaign to attract new volunteers and randomly assigned them to either receive or not to receive information about a failed mail campaign pursuing the same goal. We find that informed workers performed better, regardless of whether they had previously worked on the failed mail campaign or not. Evidence from a second field experiment with students asked to support voluntarily a campaign for reducing food waste corroborates the finding. We explore the role of leadership tactics behind our findings in a third online survey experiment. We conclude that information about past failure is unlikely to have a negative impact on work performance, and might even lead to performance improvement. Implications for future research on the relevance of leadership tactics when giving such information are discussed.
Read article
Labor in the Boardroom
Jörg Heining, Simon Jäger, Benjamin Schoefer
Quarterly Journal of Economics,
No. 2,
2021
Abstract
We estimate the wage effects of shared governance, or codetermination, in the form of a mandate of one-third of corporate board seats going to worker representatives. We study a reform in Germany that abruptly abolished this mandate for stock corporations incorporated after August 1994, while it locked the mandate for the slightly older cohorts. Our research design compares firm cohorts incorporated before the reform and after; in a robustness check we draw on the analogous difference in unaffected firm types (LLCs). We find no effects of board-level codetermination on wages and the wage structure, even in firms with particularly flexible wages. The degree of rent sharing and the labor share are also unaffected. We reject that disinvestment could have offset wage effects through the canonical hold-up channel, as shared governance, if anything, increases capital formation.
Read article
Involuntary Unemployment and the Business Cycle
Lawrence J. Christiano, Mathias Trabandt, Karl Walentin
Review of Economic Dynamics,
January
2021
Abstract
Can a model with limited labor market insurance explain standard macro and labor market data jointly? We construct a monetary model in which: i) the unemployed are worse off than the employed, i.e. unemployment is involuntary and ii) the labor force participation rate varies with the business cycle. To illustrate key features of our model, we start with the simplest possible framework. We then integrate the model into a medium-sized DSGE model and show that the resulting model does as well as existing models at accounting for the response of standard macroeconomic variables to monetary policy shocks and two technology shocks. In addition, the model does well at accounting for the response of the labor force and unemployment rate to these three shocks.
Read article