International Trade and Collective Bargaining Outcomes: Evidence from German Employer–Employee Data

Authors


  • We are very grateful to Stefan Bender, Bernhard Boockmann, Hartmut Egger, Peter Egger, Daniel Etzel, Oleg Itskhoki, Elke Jahn, Christian Keuschnigg, Catia Montagna, Christoph Moser, Steffen Müller, Jakob Munch, Achim Schmillen, James Tybout, Klaus Wälde, and the anonymous referees, as well as participants at workshops and conferences in Bonn, Copenhagen, Hohenheim, Mannheim, and Tübingen for their helpful comments and advice. We would also like to thank Elke Jahn and Steffen Müller for sharing some of their stata routines with us. We would also like to thank the Fritz Thyssen Foundation (grant no. 10.10.1.124) for its financial support.

Abstract

In theoretical trade models with variable mark-ups and collective wage bargaining, exposure to international markets might reduce the exporter wage premium. We test this prediction using linked German employer–employee data covering the years 1996–2007. To separate the rent-sharing mechanism from assortative matching, we exploit individual worker information to construct profitability measures that are free of skill composition. Our results show that rent-sharing is less pronounced in more export-intensive firms or in more open industries. The exporter wage premium is highest for low-productivity firms. In line with theory, these findings are unique to the subsample of plants covered by collective bargaining.

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