Search

After the increase in inequalities following the Great Recession, studies on wage bargaining systems have increasingly focused on wage inequality. This research examines wage inequality associated with collective bargaining levels in Spain, based on matched employer–employee microdata and quantile regression methods. These methods are applied across the wage distribution, following the method proposed by Firpo et al. (2011), to estimate wage premiums associated with agreement levels and to decompose the wage differentials observed at different points of the wage distribution. From the evidence obtained it can be concluded that, although the higher wages found in firm-level agreements are explained by the better observed characteristics of firms and workers covered by these collective agreements, there remains a positive wage premium. Although this premium is seen throughout the wage distribution, it favours mostly workers in the middle and upper-middle end. This slightly increases wage inequality in comparison with sectoral agreements. In contrast, workers without collective bargaining coverage generally suffer a wage penalty. This penalty is only observed on the left of the wage distribution. It becomes a significant wage premium in the upper end of the distribution, which implies a significant increase in wage inequality. In short, the evidence of this research suggests that reducing the coverage of collective bargaining could be associated with a significant increase in wage inequality. A better policy option for countries with a predominant sectoral model, such as Spain, would be to move towards an organized decentralization model. This would cause significant gains in employment as suggested by OECD (2019) and only a slight increase in wage inequality. [ABSTRACT FROM AUTHOR]

This article examines wage differences across Spain's NUTS‐2 regions along the entire wage distribution based on matched employer‐employee microdata from 2006 to 2014. Unlike previous related studies, we properly control for differences in regional purchasing power parities, which are very large in practice. Although part of the raw regional wage differences observed is explained by differences between regions in productive structures, and, to a much lesser extent, in labor forces, noteworthy, very similar throughout the wage distribution regional differences net of composition effects arise even after controlling for a broad set of individual and firm characteristics. [ABSTRACT FROM AUTHOR]