This paper analyses changes in the wage distribution in Spain between 1995 and 2002, using data from the Wage Structure Survey. Results show a modification of the wage distribution over the period under analysis, which basically affects the low and medium wage levels. The detailed analysis of the wage distributions for workers with permanent and fixed-term contracts reveals that the latter were the ones responsible for the wage increases, while the change in the shape of the distribution at intermediate wage levels was caused by the modification of the shape of the distribution of permanent workers. By applying a semi-parametric technique that allows us to consider effects on the entire wage distribution, we conclude that the changes observed in the distributions of 1995 and 2002 were caused by modifications in the wage structure that exert a different effect depending on the type of contract: homogeneous wage improvements for fixed-term workers and decreases at intermediate wage levels for permanent workers.

Key words: Wage distribution, Permanent and fixed-term contracts, Counterfactual wages.
JEL classification: C14, J31, J41.