17 noviembre 2022
ISEAK Working Paper

The impact of the increase in the minimum wage on inequality and employment

This report analyses, through the use of MCVL microdata, the relationship between the increase in the Minimum Interprofessional Wage (SMI) for 2019 and inequality, both in terms of wages and income, as well as its impact on employment. The results confirm that the groups most affected by this increase are women, young people and immigrants. A reduction in wage inequality and an increase in the income share of the lowest quintiles are observed, which would suggest that the increase in the minimum wage has fulfilled its objective of wage compression. On the other hand, this measure has a limited negative causal impact on employment, nil in the short term but growing slightly and gradually over time, mainly in terms of job losses and, to a lesser extent, an adjustment in the labour intensity of those affected.