January 2008

IZA DP No. 3291: Teamwork and Intra-Firm Wage Dispersion among Blue-Collar Workers

revised version published in: Scottish Journal of Political Economy, 2010, 57(4), 404-429

Using data on a sample of manufacturing establishments in Germany, we find that the use of self-managed teams is associated with increased intra-firm wage inequality between skilled and unskilled blue-collar workers. We also show that moderating factors play an important role. While teamwork interacts positively with employer-provided further training and a production technology of the most recent vintage, it interacts negatively with the age of the establishment and the coverage by a collective bargaining agreement.