TY  - RPRT
        AU  - Card, David
AU  - Rica, Sara de la
        TI  - The Effect of Firm-Level Contracts on the Structure of Wages: Evidence from Matched Employer-Employee Data
        PY  - 2004/Dec/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 1421
        UR  - https://www.iza.org/index.php/publications/dp1421
        AB  - 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.
        KW  - wage inequality
KW  - labor contracts
KW  - bargaining
        ER  -