Collectively Agreed Wages as an Instrument for Recruiting Skilled Labour?: Results of a Selection Experiment Examining how Job Applicants Decide

Since the public debate often links collective bargaining agreements with good working conditions, it is natural to ask whether enterprises bound by collective agreements can use the resulting pay levels as an advertising advantage. To answer this question, the authors investigated whether a reference to collectively agreed wages could be used in job advertisements to persuade potential employees to apply. Based on a survey and an integrated selection experiment with 2,114 participants, the study particularly examines the influence of collectively agreed wages on the decision to respond to a job advertisement. The results show that despite the predominantly positive associations between collective bargaining agreements and an employer's salary structure, potential applicants are no more motivated by collectively agreed wages than by fair market wages or performance-based wages. Only a reference to pay above the collectively agreed sectoral standard can make a job advertisement stand out. Moreover, the study makes clear that, in addition to salary, other factors such as arrangements for working from home and fixed-term contracts can determine whether or not an application is sent.