Earnings differentials and the changing distribution of wages in Spain, 2005-2010

Resumen

Using administrative data from the Social Security and the Tax Administration National Agency, this paper describes the wage distribution in Spain, its evolution in recent years and the implications for increased wage dispersion. We estimate OLS and quantile regression models in order to assess the impact of personal, job and workplace attributes on between- and within-groups wage inequality. Among other things, we find that, although the average wage has been increasing over time, changes have not been uniform across the earnings distribution, making the dispersion to fall during boom years but to rise during downturn years. Furthermore, changes in the impacts of some characteristics (types of contract, skills, region and employer size) contributed to higher wage dispersion, while others (tenure) made the distribution more equal.