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

Author: David E Card; Sara de la Rica; National Bureau of Economic Research.
Publisher: Cambridge, Mass. : National Bureau of Economic Research, 2005.
Series: Working paper series (National Bureau of Economic Research), no. 11829.
Edition/Format:   eBook : Document : EnglishView all editions and formats
Summary:
Abstract: 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. We use a large matched employer-employee data set from Spain to study the effects of firm-level contracting on the structure of wages. We estimate a series of wage determination models, including specifications that  Read more...
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Material Type: Document, Internet resource
Document Type: Internet Resource, Computer File
All Authors / Contributors: David E Card; Sara de la Rica; National Bureau of Economic Research.
OCLC Number: 62465031
Notes: December 2005.
Cover title.
Description: 1 online resource (1 volume).
Series Title: Working paper series (National Bureau of Economic Research), no. 11829.
Responsibility: David Card, Sara de la Rica.

Abstract:

Abstract: 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. We use a large matched employer-employee data set from Spain to study the effects of firm-level contracting on the structure of wages. We estimate a series of wage determination models, including specifications that control for individual characteristics, co-worker characteristics, the bargaining status of the workplace, and the probability the workplace is covered by a firm-level contract. We find 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 non-competitive phenomenon.

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