Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/300595 
Year of Publication: 
2024
Series/Report no.: 
GLO Discussion Paper No. 1469
Publisher: 
Global Labor Organization (GLO), Essen
Abstract: 
Do labour institutions influence how wages respond to the business cycle? Such responsiveness can then shape several economic outcomes, including unemployment. In this paper, we examine the role of two key labour market institutions - collective bargaining and temporary contracts - upon wage cyclicality. Our evidence is drawn from rich, 2002-2020 matched data from Portugal. We find that workers not covered by collective agreements exhibit much higher wage cyclicality, especially new hires, compared to covered workers. In contrast, workers under temporary contracts do not exhibit sizable differences in cyclicality compared to counterparts under permanent (open-ended) contracts. Our findings highlight a novel angle through which labour institutions influence the labour market and the economy.
Subjects: 
Real wages
Business cycles
Collective bargaining
Temporary contracts
Employment Law
Matched data
JEL: 
J31
J52
J64
Document Type: 
Working Paper

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