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The Impact of Firm Level Contracting on Wage Levels and Inequality: Spain 1995-2002

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Author Info
Sara de la Rica () (The University of the Basque Country, IZA)
Ainara González de San Román () (The University of the Basque Country)

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Abstract

This paper provides microeconomic evidence on the variation over time of the firm-specific wage premium in Spain from 1995 to 2002, and its impact on wage inequality. We make use of two waves of a detailed linked employer-employee data set. In addition, a new data set with financial information on firms is used for 2002 to control as flexibly as possible for di¤erences in the performance of firms (aggregated at industry level). To our knowledge, there is no microeconomic evidence on the dynamics of the firm-specific wage premium for Spain or for any other country with a similar institutional setting. Our results suggest that there is a clear tendency towards centralization in the collective bargaining process in Spain over this seven-year period, that the firm-level contract wage premium undergoes a substantial decrease, particularly for women, and finally that the "centralization" observed in the collective bargaining process has resulted in a slight decrease in wage inequality.

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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 200707.

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Date of creation: 26 Nov 2007
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Handle: RePEc:ehu:dfaeii:200707

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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
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Related research
Keywords: Firm-level contracts; Matched employer-employee data; wage inequality;

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References listed on IDEAS
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  12. Richard B. Freeman, 1991. "How Much Has De-Unionisation Contributed to the Rise in Male Earnings Inequality?," NBER Working Papers 3826, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  14. Card, David, 1996. "The Effect of Unions on the Structure of Wages: A Longitudinal Analysis," Econometrica, Econometric Society, vol. 64(4), pages 957-79, July. [Downloadable!] (restricted)
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    Other versions:
  17. Simon Milner & David Metcalf, 1994. "Spanish Pay Setting Institutions and Performance Outcomes," Banco de España Working Papers 9420, Banco de España.
  18. 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. [Downloadable!] (restricted)
  19. Maarten Goos & Jozef Konings, 2000. "Does Rent-Sharing Exist in Belgium? an Empirical Analysis Using Firm Level Data," Center for Economic Studies - Discussion papers ces0019, Katholieke Universiteit Leuven, Centrum voor Economische Studiën. [Downloadable!]
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  21. David Card & Sara de la Rica, 2006. "Firm-level contracting and the structure of wages in Spain," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 59(4), pages 573-592, July. [Downloadable!] (restricted)
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