Ferran Elias (University of Girona)
Marc Riudavets-Barcons
This paper studies the interaction between minimum wages and collective bargaining, focusing on two minimum wage hikes of 6.9% and 21.5% that happened in Spain in 2017 and 2019 respectively. Leveraging geographical-sector variation in the bite of the minimum wage, we find wage spillovers until percentile 80th of the wage distribution, and positive but insignificant effects on employment. Using newly digitized data of collective agreements, we show that wage spillovers are driven by agreements with wage levels below the new minimum wage. The evidence suggests that collective bargaining systems with extended coverage help transmit minimum wage changes further up the wage distribution.