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Czech Firm-Level Bargaining and Wages

Czech Firm-Level Bargaining and Wages. Štěpán Jurajda. EVIDENCE FROM MATCHED EMPLOYER-EMPLOYEE DATA. CNB September 14, 2005. OUTLINE. DATA COVERAGE ANALYSIS OF WAGE LEVEL (mean and median) at individual level at firm level. 1. DATA AND MEASUREMENT. ISPV (MPSV=MoL, Trexima)

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Czech Firm-Level Bargaining and Wages

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  1. DCO-ZXE089-20040200-jgfPP1 Czech Firm-Level Bargaining and Wages Štěpán Jurajda EVIDENCE FROM MATCHED EMPLOYER-EMPLOYEE DATA CNB September 14, 2005

  2. DCO-ZXE089-20040200-jgfPP1 OUTLINE • DATA • COVERAGE • ANALYSIS OF WAGE LEVEL (mean and median) • at individual level • at firm level

  3. DCO-ZXE089-20040200-jgfPP1 1. DATA AND MEASUREMENT • ISPV (MPSV=MoL, Trexima) • entrepreneurial sector only • firms with over 10 employees • Data have lower sampling rates for smaller firms. Weighting matters for firms with under 250 employees. • Hourly wages for 1Q 2004 in over 2500 firms. • Add: 4Q 2003 indicator of firm-level collective agreement (with wage stipulations) based on firm answers in ISPV and a follow-up firm telephone survey: 2000 firms have CA i.e. 24% missing (more likely to be smaller firms, foreign or private firms, in hotel/restaurant, retail and construction). • Add: 4Q2003 indicator of higher-level agreements (industry-level) based on MoL extensions: 450 firms, of which 250 have the firm-level CA indicator available.

  4. DCO-ZXE089-20040200-jgfPP1 2. UNION COVERAGE57% (74%) [85%] of employees are covered by firm-level coll. agreement (CA) based on full (limited) [no] weighting. Combining the firm- and higher-level CAs, the coverage is 70% (80%) [90%]. Even if we suppose that all missing-CA-indicator firms have no CA, 44% (61%) [75%] of employees are still covered by firm collective agreements. => A safe bet is that union coverage is over 50% (70%) before (after) extensions.

  5. DCO-ZXE089-20040200-jgfPP1 2. COVERAGE of firm-level CA in firms over 250 employees (unweighted)

  6. DCO-ZXE089-20040200-jgfPP1 3a. INDIVIDUAL WAGE ANALYSIS: • The weighted average hourly wage is a bit higher in firms with firm CA (117 vs. 115CZK). The weighted median wage is 10% (8 CZK) higher with firm CA (101 vs. 83 CZK). • Excluding top 1% of wages (>451), covered avg. wages are 8% higher (103 vs. 95). Excluding managers (ISCO<20) avg. (median) covered wages are 6% (17%) higher. • Average log-wagetrade-unionpremium of +10% is not affected by worker demographics, but drops to 0after controllingfor firm size and 2-digit industry. • There is no unconditional log-wage premium to having a higher-level CA, but controlling for worker and/or firm characteristics, there is a +5% gap compared to no-CA firms. Covered firms pay substantially more to most of their workforce, but not their managers. But this wage gap disappears once we compare firms of similar size and industry. • In firms with over 250 employees (limited weighting=full weighting): • the avg. wage is 3 CZK lower and the median wage is 4 CZK higher in covered firms • unconditional log-wage premium to firm-level CA is zero but it is -20% for higher-level CA; however, conditional log-wage gaps are small and mostly insignificant. • Conditional firm-level-CA log-wage premium in large firms: • for men with college: -0.23, high-school: -0.14, apprenticeship: 0, primary: 0 • for women with college: -0.17, high-school: -0.10, apprenticeship: 0, primary: 0 Within firm type, those firms that have a CA pay less to highly productive (male) workers.

  7. DCO-ZXE089-20040200-jgfPP1 3a. BY INDUSTRYWages in Large Firms: Effect of Firm-Level CA (ignoring higher CAs)

  8. DCO-ZXE089-20040200-jgfPP1 3a. BY INDUSTRYWages in All Firms: Effect of Firm-Level CA (ignoring higher CAs)

  9. DCO-ZXE089-20040200-jgfPP1 3. Things to do • Of course, the descriptive comparisons provided up to now do not identify the causal effect of trade union coverage on wages. • What more can one do with the available cross-sectional data? • INDIVIDUAL WAGE ANALYSIS • Run quantile regressions • Is there an effect on gender wage gaps? (no) • Is predictive power of occupation dummies stronger in unionized firms? (no) • Etc. • FIRM-LEVEL ANALYSIS • Control for propensity score (matching) instead of relying on regressions, DiNardo and Lee (2004) • Card and de la Rica (2004): Spanish wages about 10 percent higher with firm-specific contracts compared to industry agreements.

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