Markets or unions? De‐unionisation and German firms' provision of flexible working‐time policies from 2002 to 2016

Abstract

AbstractWorking‐time regimes structure time‐use and (gender) inequality, but processes shaping the availability of flexible working‐hours arrangements remain poorly understood. This study adopts a longitudinal perspective to investigate change in the provision of long‐ and short‐term working‐time accounts by firms in Germany between 2002 and 2016. In this period, flexibility policies became more common, but union coverage declined, motivating the question: Are unions losing their influence on working‐time arrangements? And if so, is availability increasingly determined by firms' agency? Dualization theory implies that while unions have a narrowing sphere of influence, their collective bargaining power remains intact. By contrast, the classical assumption is that reduced coverage leads to a reduced bargaining power. A third line of argument holds that where unions' influence declines, firms' agency driven by factors such as competition for skilled employees or the need to retain female employees becomes more important. Using the German IAB Establishment Panel this study decomposes the overall expansion of flexibility policies in parts accruing to changes in firms' behaviour and changes in industrial relations and labour market conditions. The study finds that increased competition for employees contributed to better working conditions. The penalty for firms employing a high share of women decreased slightly, but not for the most legally protected policies. Erosion of collective bargaining is found to have a small negative impact on working‐time arrangements. Overall, the findings confirm that despite a diminished sphere of influence, union's bargaining power remained relatively stable.