Wage flexibility and local labour marketshomogeneity of the wage curve in Spain

  1. Roberto Bande Ramudo 1
  2. Melchor Fernández Fernández 1
  3. Víctor Montuenga Gómez 2
  1. 1 Universidade de Santiago de Compostela
    info

    Universidade de Santiago de Compostela

    Santiago de Compostela, España

    ROR https://ror.org/030eybx10

  2. 2 Universidad de Zaragoza
    info

    Universidad de Zaragoza

    Zaragoza, España

    ROR https://ror.org/012a91z28

Journal:
Documentos de Traballo. Análise Económica

ISSN: 1138-0713

Year of publication: 2011

Issue: 44

Pages: 1-35

Type: Working paper

More publications in: Documentos de Traballo. Análise Económica

Abstract

In this paper we analyse 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 existen ce 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.