International Trade and Collective Bargaining Outcomes: Evidence from German Employer-Employee Data

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An emerging literature on the role of unions in international firms mitigates the general perception that exporting firms pay higher wages. In theory, fiercer competition due to the internationalization of a firm negatively feeds back into the unions' rent extraction ability. We propose an empirical test of that prediction using German linked employer-employee data, where the information about plant- and industry-level collective agreements enable us to partition plants into different bargaining regimes. To test the rent-sharing argument we exploit the individual worker information of our data and construct profitability measures that are free of the plant's skill-composition. Our results indicate that rent-sharingin exporting plants is lower if wages are bargained collectively at theplant level. In line with the theoretical prediction we show that a surge in those plants' export intensity is negatively associated with wages.

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  • Dr.  Hans-Jörg  Schmerer
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    Dr. Hans-Jörg Schmerer // IAB Nürnberg

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