Rising Wage Inequality, the Decline of Collective Bargaining, and the Gender Wage Gap

54 Pages Posted: 3 May 2010

See all articles by Dirk Antonczyk

Dirk Antonczyk

University of Freiburg; IZA Institute of Labor Economics

Bernd Fitzenberger

Humboldt University of Berlin - School of Business and Economics

Katrin Sommerfeld

Centre for European Economic Research (ZEW), Department Labour Markets, Human Resources and Social Policy; IZA Institute of Labor Economics

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Abstract

This paper investigates the increase in wage inequality, the decline in collective bargaining, and the development of the gender wage gap in West Germany between 2001 and 2006. Based on detailed linked employer-employee data, we show that wage inequality is rising strongly ヨ driven not only by real wage increases at the top of the wage distribution, but also by real wage losses below the median. Coverage by collective wage bargaining plummets by 16.5 (19.1) percentage points for male (female) employees. Despite these changes, the gender wage gap remains almost constant, with some small gains for women at the bottom and at the top of the wage distribution. A sequential decomposition analysis using quantile regression shows that all workplace related effects (firm effects and bargaining effects) and coefficients for personal characteristics contribute strongly to the rise in wage inequality. Among these, the firm coefficients effect dominates, which is almost exclusively driven by wage differences within and between different industries. Labor demand or firm wage policy related effects contribute to an increase in the gender wage gap. Personal characteristics tend to reduce wage inequality for both, males and females, as well as the gender wage gap.

Keywords: quantile regression, collective bargaining, gender wage gap, wage distribution, sequential decomposition

JEL Classification: J31, J51, J52, C21

Suggested Citation

Antonczyk, Dirk and Fitzenberger, Bernd and Sommerfeld, Katrin, Rising Wage Inequality, the Decline of Collective Bargaining, and the Gender Wage Gap. IZA Discussion Paper No. 4911, Available at SSRN: https://ssrn.com/abstract=1599009 or http://dx.doi.org/10.2139/ssrn.1599009

Dirk Antonczyk (Contact Author)

University of Freiburg ( email )

Fahnenbergplatz
Freiburg, D-79085
Germany

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Bernd Fitzenberger

Humboldt University of Berlin - School of Business and Economics ( email )

Spandauer Str. 1
Berlin, D-10099
Germany

Katrin Sommerfeld

Centre for European Economic Research (ZEW), Department Labour Markets, Human Resources and Social Policy ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim
Germany

HOME PAGE: http://www.zew.de/en/mitarbeiter/mitarbeiter.php3?action=mita&kurz=kso

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

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