German labor unions: Shaping occupational trends and earnings across routine jobs

This paper uses individual data from the German Socio-Economic Panel (SOEP) to examine occupational trends and earnings returns to routine jobs over the period 1985- 2019. Initially, we observe a significant decline in the returns to routine task intensity (RTI), suggesting a reduced demand for routine jobs. However, once unionized workers are taken into account, this decline is reversed and becomes positive and highly significant. This highlights the role of unions in mitigating wage declines in routine occupations, consistent with results of Parolin (2021) for the U.S. labor market. Interestingly, controlling for unionization eliminates the statistical significance of the linear time trend, suggesting that unionized workers are increasingly specializing in non-routine occupations. Moreover, we find that demand for unionized workers does not decline significantly, as in the case of non-unionized workers.