@TechReport{iza:izadps:dp17923,
            	author={González, Ignacio and Sala, Hector and Trivín, Pedro},
            	title={Consumption Responses to a Major Minimum Wage Increase: Evidence from Spain},
            	year={2025},
	month={May},
            	institution={Institute of Labor Economics (IZA)},
            	address={Bonn},
            	type={IZA Discussion Paper},
            	number={17923},
            	url={https://www.iza.org/publications/dp17923},
	abstract={This paper investigates the effects of minimum wage increases on household consumption, focusing on Spain’s 2019 minimum wage increase, which raised the floor on wages by an unprecedented 22.3% in a low-inflation environment.  Leveraging high-frequency, confidential transaction data from point-of-sale devices and credit card payments at the municipal level, we exploit geographic variation in exposure to the reform to identify its effects. We find that the increase led to a significant rise of 4.5% in household consumption, with the largest gains concentrated in nonessential categories such as electronics, leisure, and spending at restaurants and hotels. We corroborate these findings using household-level data from the Spanish Household Budget Survey. Our findings can be rationalized by a simple model featuring nonhomothetic preferences.},
	keywords={nonhomothetic preferences;minimum wage;consumption;transaction data;discretionary spending},
            }