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Minimum wages in a dual labour market: Evidence from the 2019 minimum-wage hike in Spain

Author

Listed:
  • Alexander Hijzen
  • Mateo Montenegro
  • Ana Sofia Pessoa

Abstract

This paper provides an assessment of the 2019 minimum-wage hike in Spain, which increased the minimum wage by 22% and directly concerned 7% of dependent employees. The assessment is based on an individual-level analysis that follows the outcomes of workers that were employed in the year before the reform over time. Among directly affected workers, the hike in the minimum wage increased full-time equivalent monthly earnings by on average 5.8% and reduced employment by -0.6%. The wage effects are stronger for workers on open-ended contracts, while the employment effects are stronger for workers on fixed-term contracts.

Suggested Citation

  • Alexander Hijzen & Mateo Montenegro & Ana Sofia Pessoa, 2023. "Minimum wages in a dual labour market: Evidence from the 2019 minimum-wage hike in Spain," OECD Social, Employment and Migration Working Papers 298, OECD Publishing.
    • Handle: RePEc:oec:elsaab:298-en
    DOI: 10.1787/7ff44848-en
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    More about this item

    Keywords

    employment protection; fixed-term contracts; labour market duality; wage-setting; wage-shifting;
    All these keywords.

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J4 - Labor and Demographic Economics - - Particular Labor Markets
    • J8 - Labor and Demographic Economics - - Labor Standards

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