The data we use to address these questions are taken from a large-scale matched worker-firm data set for Germany, the IAB Linked Employer-Employee data set (LIAB). This data set links the IAB-Establishment Panel with individual data for the entire population of workers from the Employment Statistics Register. Due to its administrative nature, one of the major advantages of this data set is that it offers very reliable information on individual daily wages inclusive of supplemental pay as long as such pay is subject to social security contributions. Moreover, the data are especially well suited for our purposes as they offer longitudinal information on value added, collective bargaining coverage.
