What Can We Learn from Bargaining Models About Union Power? The Decline in Union Power in Germany, 1992–2009

TitleWhat Can We Learn from Bargaining Models About Union Power? The Decline in Union Power in Germany, 1992–2009
Publication TypeJournal Article
Year of Publication2014
AuthorsHirsch, Boris, and Schnabel, Claus
JournalThe Manchester School
Volume82
Issue3
Pagination347 - 362
Keywordscollective bargaining, Germany, labor market, right-to-manage, union power
Abstract

Building on the right-to-manage model of collective bargaining, this paper tries to infer union power from the observed results in wage setting. It derives a time-varying indicator of union strength taking account of taxation, unemployment benefits, and the labor market situation and confronts this indicator with annual data for Germany. The results show that union power did not change much from 1992 to 2002 but fell markedly (by about one-third) from 2002 to 2007 in the aftermath of substantial labor market reforms.