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Lutz Bellmann, Hans-Dieter Gerner and Olaf Hübler
''Effects of reciprocal concessions on employment and real capital''
( 2014, Vol. 34 No.1 )
Using a three-stage least squares estimator, this paper analyzes within a three equation model the effects of company-level pacts involving reciprocal concessions in Germany. We find that such agreements between employers and employees commonly fail to achieve their primary objective to stabilize or to extend the employment but the agreements do result in increased investments relative to the real capital stock. A matching estimator confirms this result. We furthermore distinguish between different collective bargaining regimes. We find that in establishments without any kind of collective bargaining the negative employment and the positive investment effects are stronger than in firms with industry-level bargaining. In firms with company-level bargaining we cannot find significant investment effects. The employment effects are similar to those of industry-level bargaining establishments.
Keywords: Reciprocal concessions, company-level pacts, employment, real capital, investment
JEL: J5 - Labor-Management Relations, Trade Unions, and Collective Bargaining: General
O1 - Economic Development: General
Manuscript Received : Jan 23 2013 Manuscript Accepted : Mar 31 2014

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