IDEAS home Printed from https://ideas.repec.org/a/sae/ecolab/v27y2016i4p471-489.html
   My bibliography  Save this article

Collective bargaining, wage dispersion and the economic cycle: Spanish evidence

Author

Listed:
  • Juan Francisco Canal Domínguez
  • César Rodríguez Gutiérrez

Abstract

This research analyses the effect of a ‘two-tier’ system of collective bargaining (firm bargaining and multi-employer bargaining levels) on wage dispersion in Spain. The effect of collective bargaining on the two main concepts that make up wages (the contractual or basic-bargained wage, and the wage cushion) are analysed during the last period of the upward cycle (2002–2006) and the beginning of the global financial crisis (2006–2010). The wage cushion is defined as the difference between the earned wage and the basic-bargained wage. The results show that workers covered by firm bargaining experienced greater wage dispersion than workers covered by multi-employer bargaining. On the other hand, wage dispersion for all workers decreased during the analysis period, mainly during the first stage of the current economic crisis, and particularly among workers covered by multi-employer bargaining. Both the decreasing relevance of the wage cushion in actual wage formation and its reduced dispersion make it possible to explain this wage compression.

Suggested Citation

  • Juan Francisco Canal Domínguez & César Rodríguez Gutiérrez, 2016. "Collective bargaining, wage dispersion and the economic cycle: Spanish evidence," The Economic and Labour Relations Review, , vol. 27(4), pages 471-489, December.
    • Handle: RePEc:sae:ecolab:v:27:y:2016:i:4:p:471-489
    DOI: 10.1177/1035304616675782
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/1035304616675782
    Download Restriction: no
    File URL: https://libkey.io/10.1177/1035304616675782?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Bastos, Paulo & Monteiro, Natália P. & Straume, Odd Rune, 2009. "Firm heterogeneity and wages in unionised labour markets: Theory and evidence," Labour Economics, Elsevier, vol. 16(4), pages 440-450, August.
    2. Hibbs, Douglas Jr. & Locking, Hakan, 1996. "Wage compression, wage drift and wage inflation in Sweden," Labour Economics, Elsevier, vol. 3(2), pages 109-141, September.
    3. Plasman, Robert & Rusinek, Michael & Rycx, François, 2006. "Wages and the Bargaining Regime under Multi-level Bargaining: Belgium, Denmark and Spain," IZA Discussion Papers 1990, Institute of Labor Economics (IZA).
    4. Daniele Checchi & Laura Pagani, 2005. "The effects of unions on wage inequality. The Italian case in the 1990s," Politica economica, Società editrice il Mulino, issue 1, pages 43-70.
    5. Bertola, Giuseppe & Blau, Francine D & Kahn, Lawrence, 2001. "Comparative Analysis of Labour Market Outcomes: Lessons for the US from International Long-Run Evidence," CEPR Discussion Papers 3023, C.E.P.R. Discussion Papers.
    6. Stéphane Bonhomme & Laura Hospido, 2017. "The Cycle of Earnings Inequality: Evidence from Spanish Social Security Data," Economic Journal, Royal Economic Society, vol. 127(603), pages 1244-1278, August.
    7. John Dinardo & Thomas Lemieux, 1997. "Diverging Male Wage Inequality in the United States and Ganada, 1981–1988: Do Institutions Explain the Difference?," ILR Review, Cornell University, ILR School, vol. 50(4), pages 629-651, July.
    8. Rowthorn, R E, 1992. "Centralisation, Employment and Wage Dispersion," Economic Journal, Royal Economic Society, vol. 102(412), pages 506-523, May.
    9. repec:adr:anecst:y:1996:i:41-42:p:08 is not listed on IDEAS
    10. John Driffill, 2006. "The Centralization of Wage Bargaining Revisited: What Have we Learnt?," Journal of Common Market Studies, Wiley Blackwell, vol. 44(4), pages 731-756, November.
    11. Carlos Garcia‐Serrano & Miguel A. Malo, 2002. "Worker Turnover, Job Turnover and Collective Bargaining in Spain," British Journal of Industrial Relations, London School of Economics, vol. 40(1), pages 69-85, March.
    12. David Card & Sara De La Rica, 2006. "Firm-Level Contracting and the Structure of Wages in Spain," ILR Review, Cornell University, ILR School, vol. 59(4), pages 573-592, July.
    13. François Rycx, 2002. "Inter-industry wage differentials: evidence from Belgium in a cross-national perspective," ULB Institutional Repository 2013/791, ULB -- Universite Libre de Bruxelles.
    14. Teulings,Coen & Hartog,Joop, 2008. "Corporatism or Competition?," Cambridge Books, Cambridge University Press, number 9780521049399, January.
    15. Sven Jung & Claus Schnabel, 2011. "Paying More than Necessary? The Wage Cushion in Germany," LABOUR, CEIS, vol. 25(2), pages 182-197, June.
    16. José María Arranz & Carlos García-Serrano, 2014. "How green was my valley," International Journal of Manpower, Emerald Group Publishing Limited, vol. 35(7), pages 1059-1087, September.
    17. Blau, Francine D & Kahn, Lawrence M, 1996. "International Differences in Male Wage Inequality: Institutions versus Market Forces," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 791-836, August.
    18. Carlo Dell’Aringa & Laura Pagani, 2007. "Collective Bargaining and Wage Dispersion in Europe," British Journal of Industrial Relations, London School of Economics, vol. 45(1), pages 29-54, March.
    19. Bernd Fitzenberger & Karsten Kohn & Alexander C. Lembcke, 2013. "Union Density and Varieties of Coverage: The Anatomy of Union Wage Effects in Germany," ILR Review, Cornell University, ILR School, vol. 66(1), pages 169-197, January.
    20. Christian M. Dahl & Daniel le Maire & Jakob R. Munch, 2013. "Wage Dispersion and Decentralization of Wage Bargaining," Journal of Labor Economics, University of Chicago Press, vol. 31(3), pages 501-533.
    21. Diego R. Palenzuela & Juan F. Jimeno, 1996. "Wage Drift in Collective Bargaining at the Firm Level: Evidence from Spain," Annals of Economics and Statistics, GENES, issue 41-42, pages 187-206.
    22. O. Ashenfelter & D. Card (ed.), 1999. "Handbook of Labor Economics," Handbook of Labor Economics, Elsevier, edition 1, volume 3, number 3.
    23. Blau, Francine D. & Kahn, Lawrence M., 1999. "Institutions and laws in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 25, pages 1399-1461, Elsevier.
    24. Herwig Immervoll & Linda Richardson, 2013. "Redistribution Policy in Europe and the United States: Is the Great Recession a 'Game Changer' for Working-age Families?," OECD Social, Employment and Migration Working Papers 150, OECD Publishing.
    25. Jenkins, Stephen P. & Brandolini, Andrea & Micklewright, John & Nolan, Brian (ed.), 2012. "The Great Recession and the Distribution of Household Income," OUP Catalogue, Oxford University Press, number 9780199671021.
    26. Ana Rute Cardoso & Pedro Portugal, 2005. "Contractual Wages and the Wage Cushion under Different Bargaining Settings," Journal of Labor Economics, University of Chicago Press, vol. 23(4), pages 875-902, October.
    27. Toke Aidt & Zafiris Tzannatos, 2002. "Unions and Collective Bargaining : Economic Effects in a Global Environment," World Bank Publications - Books, The World Bank Group, number 15241.
    28. Dell'Aringa, Carlo & Lucifora, Claudio, 1994. "Collective bargaining and relative earnings in Italy," European Journal of Political Economy, Elsevier, vol. 10(4), pages 727-747, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ramos, Raul & Sanromá, Esteban & Simón, Hipólito, 2022. "Collective bargaining levels, employment and wage inequality in Spain," Journal of Policy Modeling, Elsevier, vol. 44(2), pages 375-395.
    2. Raul Ramos & Esteban Sanromá & Hipólito Simón, 2018. "Wage differentials by bargaining regime in Spain (2002-2014). An analysis using matched employer-employee data," Working Papers 2018/23, Institut d'Economia de Barcelona (IEB).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Brändle, Tobias, 2024. "Unions and Collective Bargaining: The Influence on Wages, Employment and Firm Survival," GLO Discussion Paper Series 1457, Global Labor Organization (GLO).
    2. Kauhanen, Antti & Maczulskij, Terhi & Riukula, Krista, 2020. "Heterogeneous Impacts of the Decentralization of Collective Bargaining," IZA Discussion Papers 13867, Institute of Labor Economics (IZA).
    3. Andrea Garnero & François Rycx & Isabelle Terraz, 2020. "Productivity and Wage Effects of Firm‐Level Collective Agreements: Evidence from Belgian Linked Panel Data," British Journal of Industrial Relations, London School of Economics, vol. 58(4), pages 936-972, December.
    4. Valeria Cirillo & Matteo Sostero & Federico Tamagni, 2019. "Firm-level pay agreements and within-firm wage inequalities: Evidence across Europe," LEM Papers Series 2019/12, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    5. Susan Hayter & Bradley Weinberg, 2011. "Mind the Gap: Collective Bargaining and Wage Inequality," Chapters, in: Susan Hayter (ed.), The Role of Collective Bargaining in the Global Economy, chapter 6, Edward Elgar Publishing.
    6. Joan Daouli & Michael Demoussis & Nicholas Giannakopoulos & Ioannis Laliotis, 2013. "Firm-Level Collective Bargaining and Wages in G reece: A Quantile Decomposition Analysis," British Journal of Industrial Relations, London School of Economics, vol. 51(1), pages 80-103, March.
    7. Ramos, Raul & Sanromá, Esteban & Simón, Hipólito, 2018. "Wage Differentials by Bargaining Regime in Spain (2002-2014): An Analysis Using Matched Employer-Employee Data," IZA Discussion Papers 12013, Institute of Labor Economics (IZA).
    8. Robert Plasman & Michael Rusinek & François Rycx, 2006. "Wages and the bargaining regime under multi-level bargaining: Belgium, Denmark and Spain," DULBEA Working Papers 06-01.RS., ULB -- Universite Libre de Bruxelles.
    9. Elin Svarstad & Ragnar Nymoen, 2023. "Wage inequality and union membership at the establishment level: An econometric study using Norwegian data," Oxford Economic Papers, Oxford University Press, vol. 75(2), pages 371-392.
    10. Christian M. Dahl & Daniel le Maire & Jakob R. Munch, 2013. "Wage Dispersion and Decentralization of Wage Bargaining," Journal of Labor Economics, University of Chicago Press, vol. 31(3), pages 501-533.
    11. Andréasson, Hannes, 2014. "The effect of decentralized wage bargaining on the structure of wages and firm performance," Ratio Working Papers 241, The Ratio Institute.
    12. Michael Rusinek & François Rycx, 2013. "Rent-Sharing under Different Bargaining Regimes: Evidence from Linked Employer–Employee Data," British Journal of Industrial Relations, London School of Economics, vol. 51(1), pages 28-58, March.
    13. Boeri, Tito, 2014. "Two-Tier Bargaining," IZA Discussion Papers 8358, Institute of Labor Economics (IZA).
    14. Antti Kauhanen & Terhi Maczulskij & Krista Riukula, 2024. "The incidence and effects of decentralized wage bargaining in Finland," Journal of Labor Research, Springer, vol. 45(2), pages 232-253, June.
    15. Salverda, Wiemer & Checchi, Daniele, 2014. "Labour-Market Institutions and the Dispersion of Wage Earnings," IZA Discussion Papers 8220, Institute of Labor Economics (IZA).
    16. Susan Hayter, 2015. "Unions and collective bargaining," Chapters, in: Janine Berg (ed.), Labour Markets, Institutions and Inequality, chapter 4, pages 95-122, Edward Elgar Publishing.
    17. Salimata Sissoko, 2011. "Working Paper 03-11 - Niveau de décentralisation de la négociation et structure des salaires," Working Papers 1103, Federal Planning Bureau, Belgium.
    18. Du Caju, Philip & Fuss, Catherine & Wintr, Ladislav, 2009. "Understanding sectoral differences in downward real wage rigidity: workforce composition, institutions, technology and competition," Working Paper Series 1006, European Central Bank.
    19. Ramos, Raul & Sanromá, Esteban & Simón, Hipólito, 2022. "Collective bargaining levels, employment and wage inequality in Spain," Journal of Policy Modeling, Elsevier, vol. 44(2), pages 375-395.
    20. Veronique Genre & Karsten Kohn & Daphne Momferatou, 2011. "Understanding inter-industry wage structures in the euro area," Applied Economics, Taylor & Francis Journals, vol. 43(11), pages 1299-1313.

    More about this item

    Keywords

    Collective bargaining; economic crisis; Spain; wage cushion; wage dispersion;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:ecolab:v:27:y:2016:i:4:p:471-489. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.