Wage differences in the hospitality sector

The article examines the origin of differences between wages in the hospitality sector and the rest of the private sector in Spain. The evidence obtained for the 2002–2010 period shows that the wage disadvantage of hospitality presents an increasing profile along the wage distribution so that it is particularly relevant for those earning comparatively higher salaries. In contrast with other low-wage sectors, lower wages in hospitality are explained almost entirely by the specific characteristics of its workers and jobs (particularly their lower educational qualifications and their higher presence in low-skilled occupations), and not by the existence of lower rewards to those characteristics. Highly qualified individuals are however an exception since they suffer a wage penalty for working in the sector. Furthermore the analysis shows that pay inequality is substantially lower in the hospitality sector and that it is not due to the relative characteristics of its workers and jobs. This work was supported by the Spanish Ministry of Economy and Competitiveness under Grants CSO2011-29943-C03-02 and CSO2014-55780-C3-2-P (National R&D&I Plan).