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During the Great Recession, two opposite migratory phenomena occurred in Spain. While international emigration skyrocketed, internal migration strongly declined. However, when we focus our attention on migration to the larger urban areas in Spain, we observe an increase in population since the crisis outbreak. In this work, we determine the effect of labour market factors on migration flows towards 45 Spanish Functional Urban Areas for the recent recessive period. By performing this analysis, we link two strands of academic literature: the literature on migration in Spain, which obtains inconclusive results on the effect of labour market factors on internal migration in previous instability periods, and literature related to cities, generally acknowledging that they attract population as they offer more jobs and better wages. We use an extended gravity model and consider economically consistent territorial units. Our results indicate that wages and employment rates highly influence migration to cities. We check the results considering provinces and Local Labour Market Areas as origins of the flows. From the results, we can confirm the strong role of labour markets in migration to cities, irrespective of the origin unit considered.

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The effect of minimum wages increases on youth employment level has been extensively analysed, but recent contributions have highlighted the potential bias in these studies due to neglected spatial autocorrelation in the considered relationship. This paper contributes to this scarce literature by providing novel evidence for a country with very low interregional mobility. The aim is to see if the bias of neglecting spatial dependence acts in a similar direction than in the few studies for the United States and if this bias explains the low elasticity of youth employment to minimum wages in Spain compared to the international literature. Our results show the relevance of spatial spillovers in the Spanish regional labour markets, but after correcting for the bias, we do not find a significant negative elasticity of youth employment to minimum wages, with the only exception of those between 16 and 19 years old.

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