TY  - RPRT
        AU  - Jung, Sven
AU  - Schnabel, Claus
        TI  - Paying More than Necessary? The Wage Cushion in Germany
        PY  - 2009/Jul/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 4278
        UR  - https://www.iza.org/index.php/publications/dp4278
        AB  - Using a representative establishment data set for Germany, we show that more than 40 percent of plants covered by collective agreements pay wages above the level stipulated in the agreement, which gives rise to a wage cushion between the levels of actual and contractual wages. Cross-sectional and fixed-effects estimations for the period 2001-2006 indicate that the wage cushion mainly varies with the profit situation of the plant and with indicators of labour shortage and the business cycle. While plants bound by multi-employer sectoral agreements seem to pay wage premiums in order to overcome the restrictions imposed by the rather centralized system of collective bargaining in Germany, plants which make use of single-employer agreements are significantly less likely to have wage cushions.
        KW  - wages
KW  - wage cushion
KW  - wage determination
KW  - bargaining
KW  - Germany
        ER  -