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Journal of Population Economics

, Volume 25, Issue 2, pp 511–543 | Cite as

The contribution of changes in employment composition and relative returns to the evolution of wage inequality: the case of Spain

  • Aitor LacuestaEmail author
  • Mario Izquierdo
Original Paper

Abstract

Wage inequality in Spain decreased slightly between 1995 and 2006 despite significant changes in employment composition. Changes in the composition of the workforce would have increased inequality keeping constant wage structure, but changes in wage differentials are the most important factor determining the evolution of inequality. By subperiods, the low end of the wage distribution compressed between 1995 and 2002, while it experienced a slight increase in inequality afterward, as it was observed in the USA. On the other hand, in contrast to the American case, the high end of the wage distribution was strikingly compressed in the second period.

Keywords

Inequality Wage distribution Labor force composition 

JEL Classification

J30 J00 

Notes

Acknowledgements

The authors would like to thank J. F. Jimeno, P. L’Hotellerie, E. Ortega, two anonymous referees, and the participants at the seminar at the Banco de España, the European Central Bank’s Centre for Economic Policy Research, the Fundación de Estudios de economía aplicada, the research department of Banco Bilbao Vizcaya Argentaria, the XXIXth Symposium of Economic Research in Oviedo, Workshop on Spanish Inequality in Carmona, and the University of Barcelona. The opinions and analyses in this article are the responsibility of the authors and, therefore, do not necessarily coincide with those of the Banco de España or the Eurosystem.

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Copyright information

© Springer-Verlag 2011

Authors and Affiliations

  1. 1.Directorate General Economics, Statistics and ResearchBanco de EspañaMadridSpain

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