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This research examines wage differentials associated to different collective bargaining regimes in Spain and their evolution over time based on matched employer-employee microdata. The primary objective is to analyse the wage differentials associated to the presence of a firm-level agreement and how they have evolved, taking into account the changes in the economic cycle and the recent labour reform of 2012. The second objective of the study is to examine the impact on wages of an absence of a collective agreement. This regime has become more prevalent due to the regulatory changes associated to the labour reform. From the evidence obtained it may be concluded that, although the higher wages observed in company-level agreements are systematically explained by the better characteristics of firms with labour agreements, there is a positive wage premium that favours workers mostly in the middle and upper-middle end of the wage distribution. This premium has remained relatively stable over time and does not seem to have been affected by the reform, although a degree of cyclical evolution cannot be ruled out. With respect to the impact on wages of the absence of a collective agreement, the results suggest that this level of bargaining, which is still fairly scarce, despite displaying an increasing trend, is associated, on average, to comparatively low wages, and, consequently, to higher wage flexibility. The principal explanatory cause for this wage differential is the existence of a negative wage premium for workers of firms covered by sectoral agreements, particularly those at the lower end of the distribution.

This study examines wage differences across Spain's regions along the entire wage distribution based on matched employer-employee microdata from 2006 to 2014. Unlike previous studies, we control for differences in regional purchasing power parities, which are very large in practice. Although many of the raw wage differences observed are explained by differences between regional productive structures and, to a lesser extent, in labour forces, noteworthy regional differences net of composition effects remain after controlling for a broad set of individual and firm characteristics. Unexplained wage differences are generally very similar throughout the wage distribution and are strongly persistent over time, despite significant changes in both economic cycle and labour regulations that occurred in Spain during the examined period. This evidence suggests the presence of common mechanisms in the generation of regional wage differentials that affect the whole labour force and that are strongly persistent over time, which is consistent with a key role of collective bargaining