OECD Social, Employment and Migration Working Papers
This series is designed to make available to a wider readership selected labour market, social policy and migration studies prepared for use within the OECD. Authorship is usually collective, but principal writers are named. The papers are generally available only in their original language - English or French - with a summary in the other.
- ISSN: 1815199X (online)
- https://doi.org/10.1787/1815199X
Minimum wages in a dual labour market
Evidence from the 2019 minimum-wage hike in Spain
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.
Keywords: wage-shifting, wage-setting, employment protection, labour market duality, fixed-term contracts
JEL:
J3: Labor and Demographic Economics / Wages, Compensation, and Labor Costs;
J8: Labor and Demographic Economics / Labor Standards: National and International;
J4: Labor and Demographic Economics / Particular Labor Markets
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