Pedro Trivin (University of Milan)
Ignacio Gonzalez and Raquel Sebastian
In 2019, the Spanish government raised the minimum wage by 22.3%, marking an unprecedented increase in both nominal and real terms. This paper examines the impact of this increase on the gender wage gap. Our approach is twofold. First, we leverage municipal-level variations in exposure to the reform. Our findings suggest that the minimum wage significantly reduced the gender wage gap, with 36% and 25% reductions at the 5th and 10th percentiles of the wage distribution, respectively. Second, we analyze individual-level data to compare the effects on wages and employment for both women and men. Here, our findings reveal that wages increased substantially and similarly for low-earnings men and women following the policy change, while neither their working hours nor employment probabilities were affected. Taken together, our results highlight three key findings: i) the minimum wage significantly reduced income disparities between men and women; ii) this reduction was primarily driven by compositional effects (i.e., women being overrepresented in low-paid jobs), as we find no evidence of differentiated impact between comparable men and women; iii) the minimum wage increase did not affect employment outcomes for either women or men.