TY  - JOUR
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
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11829
PY  - 2005
Y2  - December 2005
UR  - http://www.nber.org/papers/w11829
L1  - http://www.nber.org/papers/w11829.pdf
N1  - Author contact info:
David Card
Department of Economics
549 Evans Hall, #3880
University of California, Berkeley
Berkeley, CA  94720-3880
Tel: 510/642-5222
Fax: 510/643-7042
E-Mail: card@econ.berkeley.edu

Sara de la Rica
AB  - 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.
ER  -