A second channel through which collectively bargained wages might promote wage insurance relates to the level of wage bargaining. If wages are determined at sectoral or national levels, this should open up less possibilities for local wage adjustments as compared with firm-level wage bargaining. Taken together, the overall view that emerges from these considerations is that collective bargaining may act as a substitute for legal contractual enforcement and may therefore serve as a device to promote implicit contractual arrangements when legal enforcement is otherwise unavailable
