Bargaining and Inequality in the Labor Market

Research Question. How prevalent is individual wage bargaining in the labor market, what determines firms’ bargaining strategies, how do bargaining encounters unfold for workers, and does heterogeneity in bargaining behavior translate into wage inequality—including the gender wage gap?

Data and Setting. The paper develops and validates novel linked survey data for Germany. A firm survey was fielded by the ifo Institute to senior HR professionals and managers in two waves (September 2021 and January 2022), yielding 772 complete responses across all major sectors and regions. These responses were linked—with consent obtained from 72% of firms—to German Social Security records (the Integrated Employment Biographies, IEB) covering 416,821 full-time employees at matched firms in 2020, and to Orbis balance sheet data for firm productivity proxies. A separate worker survey was fielded by the IAB to 135,000 full-time German workers, with 9,756 completing it; nearly 10,000 responses were used for analysis, with 7,079 workers employed at surveyed firms. The worker survey elicited detailed bargaining histories for workers who had received an outside offer in the prior six months, bargaining at the start of current employment (for workers with tenure of three years or less), and responses to a hypothetical salary expectation scenario.

Talent Hoarding in Organizations

This paper provides the first empirical evidence of talent hoarding in organizations — the practice whereby managers deliberately suppress workers’ internal mobility to retain productive team members, thereby serving their own performance-based compensation interests at the expense of firm-wide talent allocation. The research question is whether managers with misaligned incentives hoard talent, how this can be measured, and what consequences it have for worker career outcomes and organizational efficiency.

The study uses personnel records from a large German manufacturing firm with over 200,000 employees worldwide, focused on more than 30,000 white-collar and management employees in Germany, covering over 300,000 employee-by-quarter observations from 2015 to 2018. This is supplemented by a manager survey (62% response rate, over 3,000 responses) and an employee survey (50% response rate, over 15,000 responses), plus the universe of internal job application and hiring data covering over 16,000 job openings and over 200,000 applicants.

Ingrid Haegele | Macro Paper Warehouse

Bargaining and Inequality in the Labor Market

Talent Hoarding in Organizations