John T. Addison
University of South Carolina – Moore School of Business – Department of Economics; Institute for the Study of Labor (IZA)
UCL; National Institute of Economic and Social Research (NIESR)
Universidade de Coimbra – Faculdade de Economia; Center for European Economic Research (ZEW)
Government of the Federal Republic of Germany – Institute for Employment Research (IAB)
Institute for Employment Research (IAB); Institute for the Study of Labor (IZA)
IZA Discussion Paper No. 5030
This paper investigates trends in collective bargaining and worker representation in Germany from 2000 to 2008. It seeks to update and widen earlier analyses pointing to a decline in collective bargaining, while providing more information on the dual system as a whole. Using data from the IAB Employment Panel and the German Employment Register, we report evidence of a systematic and continuing erosion of the dual system. Not unnaturally the decline is led by developments in western Germany. Arguably, the path of erosion will continue until rough and ready convergence is reached with eastern Germany. Expressed differently, if the process of decentralization underpinning these developments once was ‘regulated’ it no longer appears to be so.