In many European countries, sectoral bargaining agreements are automatically extended to cover all firms in an industry. Employers and employees can also negotiate firm-specific contracts. The authors of this paper use a large matched employer-employee data set from a 1995 survey in Spain to study the effects of firm-level contracting on the structure of wages. They estimate a series of wage determination models, including specifications that control for individual characteristics, coworker characteristics, the bargaining status of the workplace, and the probability that the workplace was covered by a firm-level contract. They find that firm-level contracting was associated with a 5-10% wage premium, with larger premiums for more highly paid workers. Although they cannot decisively test between alternative explanations for the firm-level contracting premium, they find that workers with firm-specific contracts had significantly longer job tenure than other workers, suggesting that the premium was at least partially a non-competitive phenomenon. (Free full-text download available at http://digitalcommons.ilr.cornell.edu/ilrreview/.)
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Article provided by ILR Review, ILR School, Cornell University in its journal ILR Review.
Volume (Year): 59 (2006) Issue (Month): 4 (July) Pages: 573-592 Download reference. The following formats are available: HTML,
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