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In this article, we document and discuss salient features of collective bargaining systems in the OECD countries, with the goal of debunking some misconceptions and myths and revitalizing the general interest in wage setting and collective bargaining. We hope that such an interest may help close the gap between how economists tend to model wage setting and how wages are actually set. Canonical models of competitive labor markets, monopsony, and search and matching all assume a decentralized wage setting where individual firms and workers determine wages. In most advanced economies, however, it is common that firms or employer associations bargain with unions over wages, producing collective bargaining systems. We show that the characteristics of these systems vary in important ways across advanced economies, with regards to both the scope and the structure of collective bargaining.

We give an overview of the “German model” of industrial relations. We organize our review by focusing on the two pillars of the model: sectoral collective bargaining and firm-level codetermination. Relative to the United States, Germany outsources collective bargaining to the sectoral level, resulting in higher coverage and the avoidance of firm-level distributional conflict. Relative to other European countries, Germany makes it easy for employers to avoid coverage or use flexibility provisions to deviate downwards from collective agreements. The greater flexibility of the German system may reduce unemployment, but may also erode bargaining coverage and increase inequality. Meanwhile, firm-level codetermination through worker board representation and works councils creates cooperative dialogue between employers and workers. Board representation has few direct impacts owing to worker representatives’ minority vote share, but works councils, which hold a range of substantive powers, may be more impactful. Overall, the German model highlights tensions between efficiency-enhancing flexibility and equity-enhancing collective action.

This paper uses firm-level panel data of on-the-job training to estimate its impact on productivity and wages. To this end, we apply and extend the control function approach for estimating production functions, which allows us to correct for the endogeneity of input factors and training. We find that the productivity premium of a trained worker is substantially higher compared to the wage premium. Our results are consistent with recent theories that explain work-related training by imperfect competition in the labor market.

We develop and estimate a general equilibrium search and matching model that accounts for key business cycle properties of macroeconomic aggregates, including labor market variables. In sharp contrast to leading New Keynesian models, we do not impose wage inertia. Instead we derive wage inertia from our specification of how firms and workers negotiate wages. Our model outperforms a variant of the standard New Keynesian Calvo sticky wage model. According to our estimated model, there is a critical interaction between the degree of price stickiness, monetary policy, and the duration of an increase in unemployment benefits.

We conduct a series of laboratory experiments to understand what role commitment and reputation play in bargaining. The experiments implement the Abreu and Gul (2000) bargaining model that demonstrates how introducing behavioral types, which are obstinate in their demands, creates incentives for all players to build reputations for being hard bargainers. The data are qualitatively consistent with the theory, as subjects mimic induced types. Furthermore, we find evidence for the presence of complementary types, whose initial demands acquiesce to induced behavioural demands. However, there are quantitative deviations from the theory: subjects make aggressive demands too often and participate in longer conflicts before reaching agreements. Overall, the results suggest that the Abreu and Gul (2000) model can be used to gain insights to bargaining behavior, particularly in environments where the process underlying obstinate play is well established.

PurposeThis study investigates the origins and elaboration of the managerial “unitary” frame of reference associated with Alan Fox, focusing on unionised firms: the industrial relations context, intellectual roots, elaboration, adaptation by other writers, and international applicability.Design/methodology/approachTracing the above requirements through contemporaneous sources.FindingsFox’s designation of the unitary frame needs to be understood in its 1960s’ context, particularly the promotion of “productivity bargaining”, and its furthering through management training and education. Fox’s specific contribution is identified. Subsequent UK writers have underplayed the importance of the legal dimension of managerial authority, especially relevant in the US context, while other extra-economic factors bolster the managerial unitary frame in authoritarian societies such as China.Originality/valueThe use of Fox's neglected 1960s’ writings; tracking how Fox developed the unitary frame concept and how it was funnelled into the narrow parameters of non-unionism by subsequent writers; identifying its applicability beyond the UK (with the USA as a historical example and China as a contemporary one).

What are the drivers of collective bargaining to achieve gender equality in companies? Although much research has been done on this question, answers tend to focus exclusively on the institutional perspective and to neglect the social and power relations at work. We address this deficiency in this article taking a micro-political perspective. We trace the trajectory of a bargained gender equality policy in a French company over 14 years and examine how management and unions contribute to the process. Our results show that the construction of a coalition between management and unions around gender equality, as well as the form taken by the bargained policy, are closely linked to the capabilities that these actors possess and mobilise. This study contributes to the understanding of gender equality bargaining and, more generally, to the micro-politics of collective bargaining. In doing so, it aims to connect organisation studies and industrial relations.

A number of authors have argued that the conventional model of unemployment dynamics due to Mortensen and Pissarides has difficulty accounting for the relatively volatile behavior of labor market activity over the business cycle. We address this issue by modifying the Mortensen‐Pissarides framework to allow for staggered multiperiod wage contracting. What emerges is a tractable relation for wage dynamics that is a natural generalization of the period‐by‐period Nash bargaining outcome in the conventional formulation. We then show that a reasonable calibration of the model can account for the cyclical behavior of wages and labor market activity observed in the data.

Anfang der 2000er Jahre bildeten sich einige Berufsgewerkschaften, die das alte System der Tarifeinheit lockerten, bis das Bundesarbeitsgericht schließlich 2010 die Tarifpluralität grundsätzlich zuließ. Mit dem Tarifeinheitsgesetz von 2015 sollte die Macht kleiner Berufsgewerkschaften wieder eingegrenzt werden. Die Regeln im Tarifeinheitsgesetz sind jedoch zu unbestimmt um zu verhindern, dass es zu Konflikten der Gewerkschaften innerhalb eines Unternehmens kommt. Die Bahn bietet hier ein gutes Beispiel. At the beginning of the 2000s, some professional unions were formed that replaced the old system of collective bargaining unity. In 2010, the Federal Labour Court finally permitted the collective bargaining plurality in principle. With the Collective Bargaining Unity Act of 2015, the power of smaller professional unions was supposed to be narrowed down again. The rules in the Collective Bargaining Unity Act, however, are too vague to prevent union conflicts from occurring within a company. The Deutsche Bahn offers a good example.

For decades, direct employment relationships have been increasingly displaced by indirect employment relationships through networks of firms and layers of managerial control. The firm strategies driving these changes are organizational, geographic, and technological in nature and are facilitated by state policies. The resulting weakening of traditional forms of collective bargaining and worker power have led workers to counter by organizing broader alliances and complementing structural and associational power with symbolic power and state-oriented strategies through what the authors term “network bargaining.” These dynamics point to the limitations of dominant theories and frameworks for understanding employment relations and suggest a new approach that focuses on a range of direct and indirect work relationships, evolving forms of worker power, and networked patterns of worker–employer interactions.