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Dissecting Between‐Plant and Within‐Plant Wage Dispersion: Evidence from Germany
Author(s) -
Baumgarten Daniel,
Felbermayr Gabriel,
Lehwald Sybille
Publication year - 2020
Publication title -
industrial relations: a journal of economy and society
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.61
H-Index - 57
eISSN - 1468-232X
pISSN - 0019-8676
DOI - 10.1111/irel.12249
Subject(s) - wage dispersion , wage , dispersion (optics) , economics , collective bargaining , german , function (biology) , labour economics , wage inequality , efficiency wage , geography , biology , physics , archaeology , evolutionary biology , optics
Using rich linked employer–employee data for (West) Germany between 1996 and 2014, we conduct a decomposition analysis based on recentered influence function (RIF) regressions to analyze the relative contributions of various plant and worker characteristics to the rise in German wage dispersion. Moreover, we separately investigate the sources of between‐plant and within‐plant wage dispersion. We find that industry effects and the collective bargaining regime contribute the most to rising wage inequality. In the case of collective bargaining, both the decline in collective bargaining coverage and the increase in wage dispersion among the group of covered plants have played important roles.