In Spain, as in several other European countries, sectoral bargaining agreements are automatically extended to cover all firms in an industry. Employers and employees can also negotiate firm-specific contracts. We use a large matched employer-employee data set to study the effects of firm-level contracting on the structure of wages. We estimate conventional wage determination models and a richer set of models that control for the characteristics of coworkers and the probability the workplace is covered by a firm-level contract. Our estimates suggest that firm-level contracting is associated with a 5-10 percent wage premium, with larger premiums for more highly paid workers. Although we cannot decisively test between alternative explanations for the firm-level contracting premium, workers with firm-specific contracts have significantly longer job tenure, suggesting that the premium is at least partially a noncompetitive phenomenon.
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Paper provided by University of the Basque Country - Department of Foundations of Economic Analysis II in its series DFAEII Working Papers with number
200406.
Length: Date of creation: 10 Oct 2004 Date of revision:
15 Nov 2006 Publication status: Published in Industrial and Labour Relations Review, 2006, 59(4), pp. 573-593 Handle: RePEc:ehu:dfaeii:200406
Order Information: Postal: Dpto. de Fundamentos del Análisis Económico II, Facultad de CC. Económicas y Empresariales, Universidad del País Vasco, Avda. Lehendakari Aguirre 83, 48015 Bilbao, Spain Email:
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Find related papers by JEL classification: J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Thomas Lemieux, 1993.
"Unions and Wage Inequality in Canada and the United States,"
NBER Chapters,
in: Small Differences That Matter: Labor Markets and Income Maintenance in Canada and the United States, pages 69-108
National Bureau of Economic Research, Inc.
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Disney, Richard & Gosling, Amanda & Machin, Stephen, 1996.
"What Has Happened to Union Recognition in Britain?,"
Economica,
London School of Economics and Political Science, vol. 63(249), pages 1-18, February.
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