Key points are not available for this paper at this time.
We examine the effects of Spain’s substantial 2019 minimum wage hike, from EUR 735.90 to EUR 900 per month, on labour market outcomes and consumer prices. Using the Synthetic Control Method with quarterly data from 2015 to 2023, we find no evidence of job losses or higher unemployment among low-skilled workers, indicating that the reform did not harm employment in the most exposed groups. In contrast, we detect a significant price impact with a treatment effect reaching 1 index point by 2021, driven by price increases in services and processed food. These results suggest that while the policy improved wages without reducing employment, it led to measurable cost pass-through in labour-intensive sectors, raising distributional and consumer welfare considerations.
Christl et al. (Sat,) studied this question.