German public sector wage restraint has been explained through the presence of a specific type of inter-sectoral wage coordination in the industrial relations system – i.e., export sector-led pattern bargaining. This paper has a twofold ambition. First, as a literature-assessing exercise, I...

The article tries to answer an old question of economic theory and institutional economics: How do trade unions fit into a market economy? Are they a constitutive element of the market order or: are they a source of irritation and disruption?

Using German establishment data, this study provides the first econometric analysis on the interaction of establishment-level codetermination and foreign owners. Works councils are associated with higher productivity in domestic-owned establishments while they are associated with lower...

This article examines the relationship between works councils and the closure of manufacturing establishments in Germany. The relationship varies according to circumstances and type of establishment. For the subsample of single-establishment firms, the estimates show that works council presence...

This paper is the first to show theoretically and empirically how firms' production technology affects the choice of their preferred wage formation regime. Our theoretical framework predicts, first, that the larger the total factor productivity of a firm, the more likely it is to opt for...

The effect of collective bargaining on innovation has long been in dispute. At the level of theory, the hold-up problem has been used to justify positive as well as negative effects of unionism. At the empirical level, although some would consider the North American evidence as cut and dried,...

Recent studies have pointed to the association between declining collective bargaining coverage and rising overall wage inequality. This association holds more or less across-the-board, at least for broad swathes of recent history. That said, the exact contribution of deununionization is a...