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The measure of wages in Spain
Enrique Fernández Macías, Rafael Muñoz de Bustillo
and Pablo Pedraza García
University of Salamanca
January 2005
Outline
1. Peculiarities of the Spanish Labour
Market that may affect the measure of
wages
2. Main existing sources
3. Conclusion: the need of a new source,
and some suggestions from Spain
I.1. The importance of the irregular
sector of the Economy
 Black economy: 10-20% of GDP. Informal
Labour Market: 15-20% of the total.
 This sector is hidden to institutions and
invisible to the statistical system.
 Even in the regular sector, irregular
practices: part of the wage in black,
irregular overtime…
 All this affect the measure of wages,
specially in Official and Company surveys
I.2. The prevalence of small firms
 90% of all firms employ less than 10
people. Almost 30% of all employees work
in these small firms.
 These companies do not appear in
Company surveys like the Wage Structure
Survey.
 This problem adds up with the first one
(small companies + irregular practices),
implying that the information is flawed
I.3. Temporary employment
 One third of the Spanish workers have
temporary contracts. Most contracts are
shorter than 6 months.
 Not a problem for studying labour costs,
but a terrible problem for studying
earnings (complex earnings trajectories).
 Probably, it would be much better to study
temporary and permanent employees with
different methods.
I.4. Other problems
 Less diligent respondents than in the
Netherlands or Germany.
 Administrative obscurity.
 Problems that affect all countries:
 Sensitivity of information
 Increasing complexity and variability of wage
systems
II. Main existing sources
1. Wage Strucuture Survey.
2. Labour Cost Surveys.
3. Household Panel and Budget Surveys.
4. Other sources
III. Conclusions and Suggestions

Existing sources are scarce and problematic.
The Wage Indicator Survey is a promising new
source that can fill the holes of existing
sources.
Two suggestions:




Specific routing and questions for irregular labour
market (paid in cash, inmigrants).
Refine and add questions for tracing the earnings
trajectory of last year of temporary workers, and
other sources of income.
A tool not only for researchers