Wage Posting or Wage Bargaining? Evidence from the Employers' Side

25 Pages Posted: 5 Oct 2013

See all articles by Hanna Brenzel

Hanna Brenzel

Government of the Federal Republic of Germany - Institute for Employment Research (IAB)

Hermann Gartner

Government of the Federal Republic of Germany - Institute for Employment Research (IAB); Friedrich-Alexander-Universität Erlangen-Nürnberg

Claus Schnabel

University of Erlangen-Nuremberg; IZA Institute of Labor Economics

Abstract

Using a representative establishment dataset, this paper is the first to analyze the incidence of wage posting and wage bargaining in the matching process from the employer's side. We show that both modes of wage determination coexist in the German labor market, with about two-thirds of hirings being characterized by wage posting. Wage posting dominates in the public sector, in larger firms, in firms covered by collective agreements, and in part-time and fixed-term contracts. Job-seekers who are unemployed, out of the labor force or just finished their apprenticeship are also less likely to get a chance of negotiating. Wage bargaining is more likely for more-educated applicants and in jobs with special requirements as well as in tight regional labor markets.

Keywords: wage posting, wage bargaining, hiring, matching, Germany

JEL Classification: E24, J30, J63, M51

Suggested Citation

Brenzel, Hanna and Gartner, Hermann and Schnabel, Claus, Wage Posting or Wage Bargaining? Evidence from the Employers' Side. IZA Discussion Paper No. 7624, Available at SSRN: https://ssrn.com/abstract=2336401

Hanna Brenzel (Contact Author)

Government of the Federal Republic of Germany - Institute for Employment Research (IAB)

No Address Available
Germany

Hermann Gartner

Government of the Federal Republic of Germany - Institute for Employment Research (IAB) ( email )

Regensburger Str. 104
Nuremberg, 90478
Germany

Friedrich-Alexander-Universität Erlangen-Nürnberg ( email )

Lange Gasse 20
Lange Gasse 20,
Nürnberg, 90403
Germany

Claus Schnabel

University of Erlangen-Nuremberg ( email )

Institut für Wirtschaftsforschung
Lange Gasse 20
D-90403 Nuernberg
Germany
+49 911 5302 330 (Phone)
+49 911 5302 721 (Fax)

HOME PAGE: http://https://www.arbeitsmarkt.rw.fau.de/english-version/staff/prof-dr-claus-schnabel/

IZA Institute of Labor Economics

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Bonn, D-53072
Germany

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