Strike Outcomes and Wage Settlements in Spain

Abstract

This paper analyzes collective bargaining using Spanish firm level data. Central to the analysis are the joint determination of wage and strike outcomes in a dynamic framework and the possibility of segregate wage equation for strike and non-strike outcomes. Conditional to strikes taking place, we confirm a negative relationship between strike duration and wage changes in a dynamic context. Furthermore, we find selection in wage equations induced by the strike outcome. In this sense, the possibility of wage determination processes being different in strike and non-strike samples is not rejected by the data. In particular, wage dynamics are of opposite sing in both strike and non-strike equations. Finally, we find evidence of a 0.33 percentage points wage change strike premium.JEL CODE: J52-C33-C35

The process of wage adjustment: An analysis using establishment-level data

“…The existence of conflict in the establishment may impose restrictions on pay setting by employers due to the different interests pursued by each party during the bargaining process. Moreover, it is possible that a deteriorating industrial relations climate increases the threat of industrial action, and the employer may use wage increases in order to improve the working environment (Jimenez-Martin, 2006).…”

The Process of Wage Adjustment: An Analysis Using Establishment-Level Data

“…The existence of conflict in relationships in the establishment may impose restrictions on pay setting by employers due to the different interests pursued by each party during the bargaining process. Moreover, it is possible that a deteriorating industrial relations climate increases the threat of industrial action, and the employer may use wage increases in order to improve the working environment (see Jimenez-Martin, 2006) Establishment Features and the Factors that Influence Pay Settlements…”

“…Second, collective bargaining may result in a deterioration of the employment relationship because the parties involved in negotiations pursue different interests. As a consequence, the employer could be more concerned about the importance of the industrial relations climate in pay settlements and use wage increases as a mechanism for restoring a good working environment (see Jimenez-Martin, 2006).…”