Wage flexibility and local labour markets: homogeneity of the wage curve in Spain

Roberto Bande, Melchor Fernandez and Victor Montuenga ()

No 44, Documentos de trabajo - Analise Economica from IDEGA - Instituto Universitario de Estudios e Desenvolvemento de Galicia

Abstract: In this paper we analyze wage flexibility in Spain and its regional differences, departing from the estimation of wage curves. Using data from the Wage Structure Survey, we proceed to estimate regional wage equations, relating the observed wage received by workers to a group of personal and job characteristics, as well as to the unemployment rate. This analysis allows us to test for the existence of regional differences in the degree of wage flexibility, which may have an important influence in the evolution of regional unemployment, given its impact on the ability of the local labour market to absorb negative shocks. Estimated results indicate that regions suffering from higher unemployment rates exhibit lower wage flexibility. Collective bargaining reforms should pursue greater wage flexibility, especially in regions with high rates of joblessness.

Keywords: Wage flexibility; wage curve; Wage Structure Survey; Spain; regional unemployment (search for similar items in EconPapers)
JEL-codes: J31 J64 R15 R23 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2011
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Working Paper: Wage flexibility and local labour markets: homogeneity of the wage curve in Spain (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:edg:anecon:0044

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