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This paper investigates the influence of industrial relations on firm wage premia in Germany. OLS regressions for the firm effects from a two-way fixed effects decomposition of workers’ wages by Card Heining and Kline (2013) document that average premia are larger in firms bound by collective agreements and in firms with a works council holding constant firm performance. RIF regressions show that premia are less dispersed among covered firms but more dispersed among firms with a works council. Hence deunionisation is the only among the suspects investigated that contributes to explaining the marked rise in the premia dispersion over time. |
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