The Effect of Firm-Level Contracts on the Structure of Wages: Evidence from Matched Employer-Employee Data / David Card, Sara de la Rica.

Format:

Book

Author/Creator:

Card, David.

Contributor:

National Bureau of Economic Research.

de la Rica, Sara.

Series:

Working Paper Series (National Bureau of Economic Research) no. w11829.

NBER working paper series no. w11829

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

The Effect of Firm-Level Contracts on the Structure of Wages

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2005.

Summary:

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.

Notes:

Print version record

December 2005.