A Note on the Decline of Collective Bargaining Coverage: The Role of Structural Change

Abstract

Abstract In the last 20 years there is a sharp decline in collective bargaining coverage in Germany. Research on the determinants of collective bargaining shows: subscribing to a sectoral bargaining system depends on several structural factors, like firm size, branch affiliation, owner-ship, firm age and work force composition. Parameter that – at least partly - were subject to considerable changes in the last two decades. With data of the IAB establishment panel we want to determine which part of the decline in collective bargaining coverage is due to structural change. We use a decomposition technique (Fairlie 2005) to break down the differences in coverage between 1998 and 2016. Further-more we take a look at distinct subgroups of establishments (along firm size). Our findings show that there is some influence of structural factors on the decline of collective bargaining coverage in the long run. And there are considerable differences between small and large firms with the decisions of the latter being more dependent on structural change.