The link between wages and productivity
- Montuenga-Gómez, V.M. 2
- Fernández, M. 3
- Romeu, A. 1
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1
Universitat d'Alacant
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2
Universidad de La Rioja
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3
Universidade de Santiago de Compostela
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ISSN: 0269-2171
Year of publication: 2007
Volume: 21
Issue: 2
Pages: 247-272
Type: Article
beta Ver similares en nube de resultadosMore publications in: International Review of Applied Economics
Abstract
This paper examines the effect of productivity on wages for Spanish industrial sectors by developing a model that captures effects from both sector-specific and aggregate variables. The results show that a dual behaviour can be inferred, at the sector level, in the wage-setting mechanism. It is also found that the linkage between wages and productivity varies over time. Some explanations for the increase in wage dispersion are provided, focusing on the increasing decentralisation in wage bargaining after 1986. Finally, we cast some light on the theoretical structure underlying the labour market.