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Wage inequality in Spain: recent developments

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  • Izquierdo, Mario
  • Lacuesta, Aitor

Abstract

This paper analyses wage inequality in Spain from 1995 to 2002. Inequality has decreased slightly in this period although the fall has not been constant over the whole distribution. We use non-parametric techniques to distinguish the effect on inequality of changes in the composition of the labour force and changes in relative returns. We focus mainly on three factors that have varied substantially between 1995 and 2002: female participation, educational attainment and changes in the tenure level. On one hand, changes in the composition of the labour force would have increased inequality had the structure of wages not changed in relation to the 1995 level. Changes in education and especially tenure would have been responsible for most of the higher dispersion. On the other, changes in relative returns between 1995 and 2002 are predominant and are responsible for the lower dispersion observed in the latter year. Changes in the returns to education are the main important factor underlying this decrease in inequality. JEL Classification: J30, J00

Suggested Citation

  • Izquierdo, Mario & Lacuesta, Aitor, 2007. "Wage inequality in Spain: recent developments," Working Paper Series 781, European Central Bank.
  • Handle: RePEc:ecb:ecbwps:2007781
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    Cited by:

    1. Naticchioni, Paolo & Ragusa, Giuseppe & Massari, Riccardo, 2014. "Unconditional and Conditional Wage Polarization in Europe," IZA Discussion Papers 8465, Institute for the Study of Labor (IZA).
    2. Christopoulou, Rebekka & Kosma, Theodora, 2009. "Skills and wage inequality in Greece: evidence from matched employer-employee data, 1995-2002," LSE Research Online Documents on Economics 24198, London School of Economics and Political Science, LSE Library.
    3. Ortega, Ana Carolina & Jimeno, Juan F. & Carrasco, Raquel, 2008. "The impact of immigration on the wage structure : Spain 1995-2002," UC3M Working papers. Economics we080603, Universidad Carlos III de Madrid. Departamento de Economía.
    4. Aitor Lacuesta & Sergio Puente & Pilar Cuadrado, 2009. "Omitted variables in the measure of a labour quality index: the case of Spain," Working Papers 0835, Banco de España;Working Papers Homepage.
    5. Gernandt Johannes & Pfeiffer Friedhelm, 2007. "Rising Wage Inequality in Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 227(4), pages 358-380, August.
    6. Fernández-Kranz, Daniel & Rodríguez-Planas, Núria, 2011. "The part-time pay penalty in a segmented labor market," Labour Economics, Elsevier, vol. 18(5), pages 591-606, October.
    7. Aitor Lacuesta & Mario Izquierdo, 2012. "The contribution of changes in employment composition and relative returns to the evolution of wage inequality: the case of Spain," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(2), pages 511-543, January.
    8. Cristina Barceló & Ernesto Villanueva, 2010. "The response of household wealth to the risk of losing the job: evidence from differences in firing costs," Working Papers 1002, Banco de España;Working Papers Homepage.
    9. Manuel A. Hidalgo, 2008. "Wage Inequality in Spain, 1980-2000," Working Papers 08.08, Universidad Pablo de Olavide, Department of Economics.
    10. Maria Denisa VASILESCU & Larisa STANILA & Amalia CRISTESCU, 2014. "The evolution of earnings inequality in Romania," Romanian Journal of Economics, Institute of National Economy, vol. 39(2(48)), pages 88-99, December.
    11. Raquel Carrasco & Juan F. Jimeno & A. Carolina Ortega, 2011. "Accounting for changes in the Spanish wage distribution: the role of employment Composition effects," Working Papers 1120, Banco de España;Working Papers Homepage.
    12. Manuel A. Hidalgo, 2010. "A Demand-Supply Analysis Of The Spanish Education Wage Premium," Revista de Economia Aplicada, Universidad de Zaragoza, Departamento de Estructura Economica y Economia Publica, vol. 18(3), pages 57-78, Winter.
    13. Clara Isabel González & J. Ignacio Conde-Ruiz & Michele Boldrin, 2008. "Immigration and Social Security in Spain," Working Papers 2008-36, FEDEA.
    14. Hipólito Simón, 2009. "La desigualdad salarial en España: Una perspectiva internacional y temporal," Investigaciones Economicas, Fundación SEPI, vol. 33(3), pages 439-471, September.
    15. Mauricio Zunino, 2012. "Impactos de la reinstauración de los Consejos de Salarios sobre la distribución salarial en Uruguay," Económica, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 0, pages 129-167, January-D.
    16. Ismael Ahamdanech & Carmelo García-Pérez & Hipolito Simon, 2011. "Wage inequality in Spain: A regional perspective," ERSA conference papers ersa11p1074, European Regional Science Association.
    17. Manuel Hidalgo, 2009. "Are Within-Groups `Abilities' Distribution Constant on Time?," Working Papers 09.15, Universidad Pablo de Olavide, Department of Economics.
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    More about this item

    Keywords

    inequality; labour force composition; wage distribution;

    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J00 - Labor and Demographic Economics - - General - - - General

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