Youth Differences in the Spanish Labor Market: A Review before and after the Economic Crisis

The main aim of this study was to analyze whether the wage discrimination rate between young people (between 16 and 29 years old) and non-young (older than 30 years) has increased or decreased over the last decade in Spain, and to determine whether it has been influenced by the economic growth prior to 2007, as well as by the economic crisis after.

Data from the Salary Structure Survey was used to obtain information related to the labor market in Spain from 1995 to 2010. Moreover, alternative methods for estimating the extent of labor market discrimination were used. All of the methods involved the decomposition of the differences in gross wage into both discrimination and productivity components. Additionally, a logistic regression was performed to analyze the main factors that explained the probability of being discriminated in Spain for young population.

The wage discrimination rate between young population and non-young decreased significantly over the analyzed period (especially during the years of the economic expansion (1995-2006), arriving at 0.1154 in 1995, 0.750 in 2002 and 0.068 in 2006). However, it heavily increased during the economic crisis in 2010, coming up to 0.0968.

Therefore, the economic crisis have caused a strong impact on young population as the wage discrimination rate between those younger than 30 years and those older has increased since it started. Consequently, policies need to be adopted to combat this discrimination and take advantage of the adaptation.