Staggered wages, unanticipated shocks and firms’ adjustments

Caloia, Francesco; Parlevliet, Jante; Mastrogiacomo, Mauro

doi:10.2139/ssrn.3849286

Cited by 1 publication

(1 citation statement)

References 36 publications

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“…Interestingly, a similar exercise conducted in the Netherlands, a country where the passthrough is limited, points at very limited wage and employment responses to changes in wage floors around the same macroeconomic shock [15]. The lack of data on the wage cushion in that study precludes an analysis of whether the discrepancy of the results between Spain and the Netherlands is due to a feature of collective bargaining or, simply, to differences in the fraction of workers whose wages are close to the floors.…”

Section: Comparing Pros and Cons: The Responsiveness Of Employment Gr...mentioning

confidence: 94%

Employment and wage effects of extending collective bargaining agreements

Villanueva¹,

Adamopoulou²

2022

izawol

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The overall impact of extending a collective contract to all firms in an industry depends on how much employment is lost due to the contract's provisions on minimum wages and other working conditions. Assessing the impact of collective contract extensions on wages and employment outcomes requires linking information on collective contracts registers to longitudinal data on employers and employees. New evidence based on such data sheds light on the socalled bite of negotiated minimum wage floors and shows that wage and employment responses are mostly confined to workers with earnings close to the minima. Policy mechanisms such as representation requirements and "opt-out" clauses may alleviate these concerns in some settings. ELEVATOR PITCHIn many countries, the wage floors and working conditions set in collective contracts negotiated by a subset of employers and unions are subsequently extended to all employees in an industry. Those extensions ensure common working conditions within the industry, mitigate wage inequality, and reduce gender wage gaps. However, little is known about the so-called bite of collective contracts and whether they limit wage adjustments for all workers. Evidence suggests that collective contract benefits come at the cost of reduced employment levels, though typically only for workers earning close to the wage floors.

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Section: Comparing Pros and Cons: The Responsiveness Of Employment Gr...mentioning

confidence: 94%