In Spain, as in several other European countries, sectoral bargaining agreements are automatically extended to cover … inequality for women. At the establishment level, we compare average wages under firm-level and sectoral bargaining, controlling …-specific contracting raises average wages, with a pattern of effects that tends to increase inequality relative to sectoral bargaining for …

surplus is more equitable compared to the case with a purely selfish worker. Moreover, the optimal contract with bargaining … approaches the welfare-optimal contract as the parties' bargaining power converges. Our results help explain why workers are … imply that raising the bargaining power of the less powerful party may increase welfare …