Utilization of Mixed Distributions in the Calculation of Polarization: The Case of Spain

Abstract

This study analyzes the evolution of salary polarization in the Spanish labor market. The paper proposes the use of mixed distributions to examine the consequences of the economic crisis in one of the European markets in which the unemployment rate has had greatest impact. Applying this type of distribution aims to establish the contribution of a fixed group (the unemployed population, in this particular case) to overall polarization. How unemployment benefits impact on polarization has also been analyzed. Generally speaking, the tendency of the polarization indexes calculated changes around the beginning of the crisis, with decreasing numbers during the economic growth period and the opposite behaviour in the crisis period. In addition, when mixed distributions are used, the results show that the unemployed group has played an important role in the increase of social tension from 2008 onwards. Finally, the evidence obtained shows that unemployment subsidies do not always reduce salary tensions between group populations and, in some cases, increase polarization.