Training and Union Wages

Christian Dustmann and Uta Schönberg ()
Additional contact information
Uta Schönberg: University College London
Authors registered in the RePEc Author Service: Uta Schoenberg

No 1435, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper tests the hypothesis that unions, through imposing wage floors that lead to wage compression, increase on-the-job training. Our analysis focuses on Germany which provides an interesting context to test this hypothesis, due to its large scale apprenticeship programme and its collective bargaining system that is based on voluntary union recognition. To guide the empirical analysis, we first develop a model of firm-financed training. A novel feature of our model is that a unionised and non-unionised sector coexist, and only unionized firms are bound by union wages. The model creates a rich set of empirical implications regarding apprenticeship training, layoffs, wage cuts, and wage compression in unionized and non-unionised firms. Our empirical analysis is based on firm panel data matched with administrative employee data, and provides strong support for our model. Our main results are that unionisation increases training, and that wage floors and wage compression play a more important role in unionised than in non-unionised firms.

Keywords: wage compression; unions; training; matched firm-worker data (search for similar items in EconPapers)
JEL-codes: I2 J24 J40 J51 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2004-12
New Economics Papers: this item is included in nep-bec and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (35)

Published - revised version published in: Review of Economics and Statistics, 2009, 91 (2), 363-376

Downloads: (external link)
https://docs.iza.org/dp1435.pdf (application/pdf)

Related works:
Journal Article: Training and Union Wages (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp1435

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().