DP754 Who Are the Insiders? Wage Setting in Spanish Manufacturing Firms
|Author(s):||Samuel Bentolila, Juan J. Dolado|
|Publication Date:||January 1993|
|Keyword(s):||Insiders, Outsiders, Temporary Labour Contracts|
|Programme Areas:||Human Resources|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=754|
This paper analyses the wage formation process in Spain taking into account the effect of the institutional change caused by the creation of low-firing-cost, fixed-term labour contracts. An insider-outsider model which assumes that the interests of workers under these contracts are disregarded in wage bargains is set up and tested. The estimation of a wage equation for a sample of large Spanish manufacturing firms yields an estimate of the insider weight and confirms that an increase in the proportion of fixed-term employees increases insiders' wages.