The part-time wage penalty: Does bargaining coverage outweigh regional differences in Spain?

Abstract

Abstract:The use of part-time jobs is steadily increasing in most advanced economies. Previous literature has concluded that part-time workers suffer a wage penalty, but its magnitude varies across studies and countries. The part-time penalty is the otherwise unexplained element of the gap between full-time and part-time hourly earnings. One potential factor accounting for international differences in this penalty is the coverage of collective bargaining. This article outlines research examining wage differences between part-time and full-time male and female workers in Spain, a country with a very high level of coverage of collective agreements but very heterogeneous regional labour markets. Results are obtained using an econometric decomposition specifically adapted to matched employer-employee data. They show that intra-firm wage differentials for part-and full-time workers with the same characteristics are negligible. But results that are perhaps less expected are those based on the regional analysis -an unprecedented perspective compared with the previous literature. These results show that despite very significant differences in economies and labour markets, observed wage gaps between part-time and full-time workers in each Spanish region are also mainly explained by different endowments of individual, job and firm characteristics. Overall, our evidence highlights the over-riding role of wage setting mechanisms, specifically collective bargaining coverage, in minimising inter-regional differences in the wage penalty of part-time workers.JEL Codes: J31, J22, J41, R23

The wage gap in Spain for temporary workers: the effects of the Great Recession

“…Simón et al (2008a, b), De la Rica et al (2010) and Murillo Huertas and Simón Pérez (2014) focus on gender differences, finding that there is clear wage discrimination against women. Ramos et al (2016) and Simón et al (2017) investigate the wage gap between part and full-time workers by gender on average and across the distribution respectively. They conclude that the part-time wage penalty for both genders is almost fully explained by their relative characteristics on average.…”