Spatial Effects of the Minimum Wage (Job Market Paper)

Abstract:

I study how a uniform national minimum wage affects employment and migration when local labor markets differ in productivity and are connected through costly migration. I show that Spain’s 22 percent minimum-wage increase in 2019 triggered a relocation of workers toward more productive locations, concentrated among jobs at the new minimum wage. To quantify the implications of this reallocation, I build a spatial search and matching model with heterogenous locations, migration costs, and a national minimum wage. In the model, the minimum wage affects employment by making some jobs too costly to sustain but also raises the value of low productivity employment in productive areas, making migration worthwhile for workers who previously found these opportunities unattractive. I estimate the model using pre-reform administrative data and simulate the 2019 reform as a counterfactual exercise. National unemployment rises only modestly, from 12.9 to 13.7 percent, because nearly half of the job losses are absorbed through migration toward productive locations. The minimum wage thus acts not only as a wage floor but also as a reallocation policy that polarized employment, widening spatial gaps in job opportunities.

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.