https://macropaperwarehouse.com/authors/jorg-heining/Jörg HeiningHugo -- gohugo.ioen-ushttps://macropaperwarehouse.com/papers/bargaining-and-inequality-in-the-labor-market/https://macropaperwarehouse.com/papers/bargaining-and-inequality-in-the-labor-market/<p><strong>Research Question.</strong> How prevalent is individual wage bargaining in the labor market, what determines firms&rsquo; bargaining strategies, how do bargaining encounters unfold for workers, and does heterogeneity in bargaining behavior translate into wage inequality—including the gender wage gap?</p> <p><strong>Data and Setting.</strong> 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.</p>