IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

The effect of firm-level contracts on the structure of wages: evidence from matched employer-employee data

  • De la Rica Goiricelaya, Sara
  • Card, David E.

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. Employees covered by firm-specific contracts earn about 10 percent more than those covered by sectoral contracts. The estimated premium is about the same for men in different skill groups, but higher for more highly skilled women, suggesting that firm-level contracts raise wage inequality for women. At the establishment level, we compare average wages under firm-level and sectoral bargaining, controlling for the propensity to negotiate a firm-specific contract. Consistent with the worker-level models, we find that firm-specific contracting raises average wages, with a pattern of effects that tends to increase inequality relative to sectoral bargaining for women. 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 non-competitive phenomenon.

(This abstract was borrowed from another version of this item.)

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://hdl.handle.net/10810/6724
Download Restriction: no

Paper provided by University of the Basque Country - Department of Foundations of Economic Analysis II in its series DFAEII Working Papers with number 2004-06.

as
in new window

Length:
Date of creation: Oct 2004
Date of revision:
Handle: RePEc:ehu:dfaeii:200406
Contact details of provider: Postal:
Avenida Lehendakari Aguirre, 83, 48015 Bilbao

Phone: 34-946013774
Fax: 34-946017123
Web page: http://www.dfaeii.ehu.es

More information through EDIRC

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:


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.:

as in new window
  1. Calmfore, L., 1993. "Centralization of Wage Bargaining and Macroeconomic Performance - A Survey," Papers 536, Stockholm - International Economic Studies.
  2. 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.
  3. Sara De La Rica & Thomas Lemieux, 1993. "Does Public Health Insurance Reduce Labor Market Flexibility or Encourage the Underground Economy? Evidence from Spain and the United States," NBER Working Papers 4402, National Bureau of Economic Research, Inc.
  4. David Metcalf & S Milner, 1994. "Spanish Pay Setting Institutions and Performance Outcomes," CEP Discussion Papers dp0198, Centre for Economic Performance, LSE.
  5. Nickell, Stephen & Layard, Richard, 1999. "Labor market institutions and economic performance," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 46, pages 3029-3084 Elsevier.
  6. Dell'Aringa, Carlo & Lucifora, Claudio, 1994. "Collective bargaining and relative earnings in Italy," European Journal of Political Economy, Elsevier, vol. 10(4), pages 727-747, December.
  7. Juan Francisco Canal Domínguez & César Rodríguez Gutiérrez, 2004. "Collective Bargaining and Within-firm Wage Dispersion in Spain," British Journal of Industrial Relations, London School of Economics, vol. 42(3), pages 481-506, 09.
  8. Maia Güell & Barbara Petrongolo, 2003. "How Binding are Legal Limits? Transitions from Termporary to Permanent Work in Spain," Working Papers 75, Barcelona Graduate School of Economics.
  9. Olivier Blanchard & Justin Wolfers, 1999. "The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence," NBER Working Papers 7282, National Bureau of Economic Research, Inc.
  10. Simon Milner & David Metcalf, 1994. "Spanish Pay Setting Institutions and Performance Outcomes," Working Papers 9420, Banco de España;Working Papers Homepage.
  11. Oi, Walter Y. & Idson, Todd L., 1999. "Firm size and wages," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 33, pages 2165-2214 Elsevier.
  12. Guido W. Imbens, 2004. "Nonparametric Estimation of Average Treatment Effects Under Exogeneity: A Review," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 4-29, February.
  13. Johnson, George & Solon, Gary, 1986. "Estimates of the Direct Effects of Comparable Worth Policy," American Economic Review, American Economic Association, vol. 76(5), pages 1117-25, December.
  14. Hartog, Joop & Leuven, Edwin & Teulings, Coen, 2002. "Wages and the bargaining regime in a corporatist setting: the Netherlands," European Journal of Political Economy, Elsevier, vol. 18(2), pages 317-331, June.
  15. David Card & Thomas Lemieux & W. Craig Riddell, 2004. "Unions and Wage Inequality," Journal of Labor Research, Transaction Publishers, vol. 25(4), pages 519-562, October.
  16. Stephane Mahuteau, 2002. "Reciprocal fairness and gift exchange practices in the labor," Labor and Demography 0211004, EconWPA.
  17. David G. Blanchflower & Andrew J. Oswald & Peter Sanfey, 1996. "Wages, Profits, and Rent-Sharing," The Quarterly Journal of Economics, Oxford University Press, vol. 111(1), pages 227-251.
  18. Lars Calmfors, 2001. "Wages and Wage-Bargaining Institutions in the Emu : A Survey of the Issues," CESifo Working Paper Series 520, CESifo Group Munich.
  19. Krueger, Alan B & Summers, Lawrence H, 1988. "Efficiency Wages and the Inter-industry Wage Structure," Econometrica, Econometric Society, vol. 56(2), pages 259-93, March.
  20. George A. Akerlof, 1982. "Labor Contracts as Partial Gift Exchange," The Quarterly Journal of Economics, Oxford University Press, vol. 97(4), pages 543-569.
  21. De la Rica Goiricelaya, Sara, 2002. "Decomposing the Gender Wage Gap: The effect of firms, occupations and Job Stratification," DFAEII Working Papers 2002-10, University of the Basque Country - Department of Foundations of Economic Analysis II.
  22. Samuel Bentolila & Juan F. Jimeno, . "La reforma de la negociación colectiva en España," Working Papers 2002-03, FEDEA.
  23. Card, David, 2001. "Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 22-64, January.
  24. Lemieux, T., 1993. "Unions and Wages Inequality in Canada and the United States," Cahiers de recherche 9302, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
  25. Rajeev H. Dehejia & Sadek Wahba, 1998. "Causal Effects in Non-Experimental Studies: Re-Evaluating the Evaluation of Training Programs," NBER Working Papers 6586, National Bureau of Economic Research, Inc.
  26. 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.
  27. Akerlof, George A & Yellen, Janet L, 1988. "Fairness and Unemployment," American Economic Review, American Economic Association, vol. 78(2), pages 44-49, May.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ehu:dfaeii:200406. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Alcira Macías Redondo)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.