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

Roberto Bande Ramudo ^[1] ; Melchor Fernández Fernández ^[1] ; Víctor Montuenga Gómez ^[2]
1. [1] Universidade de Santiago de Compostela
  
  Universidade de Santiago de Compostela
  
  Santiago de Compostela, España
2. [2] Universidad de Zaragoza
  
  Universidad de Zaragoza
  
  Zaragoza, España
Localización: Documentos de Traballo. Análise Económica, ISSN 1138-0713, Nº. 44, 2011, págs. 1-35
Idioma: inglés
Enlaces
- Texto completo (pdf)

Resumen
- 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.