Spatial Effects of the Minimum Wage (Job Market Paper)

Abstract:

Most labor market policies, including minimum wages, are set at the national level even though labor markets differ widely across regions. Because productivity, wages, and unemployment vary across space, a uniform minimum wage binds unevenly and can trigger reallocation of workers and jobs across locations. This paper examines the reallocation effects of uniform minimum wages across heterogeneous local labor markets.

I develop a spatial general equilibrium model with search frictions and migration costs, in which the minimum wage destroys low-productivity jobs in binding regions but simultaneously encourages workers to move toward more productive areas where employment prospects are stronger. I estimate the model using administrative data from Spain (MCVL) and implement the 2019 reform that raised the minimum wage by 22 percent. The model predicts that aggregate unemployment rises modestly, from 12.9 to 13.7 percent (+0.8 pp), but that nearly half of the gross job losses (48 percent) are offset through migration toward high-productivity provinces. Reallocation amplifies wage gains and makes the policy substantially less costly in aggregate welfare terms.

The Joint Role of Housing and Labor Market Frictions

Abstract:

This paper investigates how frictions in the housing market interact with labor market outcomes in France. Using the Fidéli dataset, which links individual housing tenure to labor market transitions, I document large differences in mobility between renters and homeowners. Renters respond to unemployment shocks by adjusting housing consumption and migrating more frequently across municipalities and regions, while owners exhibit significantly lower mobility. By merging individual data with local measures of housing costs, wages, and unemployment, I show that expensive housing markets amplify these lock-in effects, limiting geographic mobility, and shaping reemployment opportunities. These results highlight housing tenure as a key determinant of spatial adjustment of the labor market and provide new evidence on the joint role of housing and labor market frictions