The effects of minimum bargained wages on earnings: Evidence from Spain

Abstract

This paper provides an empirical evaluation of the effects of Spanish sectoral collective bargaining on wages. For this purpose, we use a sample of workers for whom bargained wage rates and earnings are available. Using a variant of the Meyer and Wise approach, we are able to estimate wage gains due to minimum bargained wages and their employment effects. The most relevant conclusion is that there is evidence of a ?sword of justice? effect by unions, but this is limited by non-compliance among unskilled workers and the non-binding nature of bargained wages for skilled workers.