Abstract
This paper reports on the employment effects of pacts for employment and competitiveness (PEC) concluded at company level and characterized by concessions from both bargaining partners. In these works, councils agree to company-specific deviations from an industry-level contract such as reduced wages or prolonged working time, in exchange for employment guarantees or investment programmes to mitigate a possible decline of employment or to improve the company's competitiveness. Since the number of empirical studies on the employment effects of PECs is very small and no investigation addressing the global economic crisis has been conducted until now, we base our analysis on the IAB Establishment Panel Survey of 2006–2009 and adopt conditional difference estimators to assess the role of PECs within the global crisis. In our analysis, we find evidence suggesting that the adoption of PECs is connected with a decreased negative employment effect within the crisis given an establishment is affected by the crisis.
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