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Teen employment has fallen sharply across advanced economies, reducing firms’ access to a traditionally flexible and low-cost source of labour, yet little is known about how they adapt to this shift. This paper studies how firms and labour markets adjust to an exogenous contraction in teen labour supply, exploiting Portugal’s 2009 compulsory schooling reform, which raised the minimum school-leaving age to 18. Using matched employer–employee data covering all private-sector firms between 2002 and 2016, we construct local labour market exposure measures capturing both the intensity and persistence of pre-reform reliance on teen workers and estimate event-study models comparing more and less exposed units. The reform led to a sharp and lasting reduction in teen employment and on-the-job training. Firms compensated primarily by hiring slightly older workers, without upgrading skills or wages, suggesting adjustment along cost rather than productivity margins. Ongoing work explores implications for productivity, capital expenditures, and technology adoption.

This paper provides empirical evidence that firms’ internal organization and pay-setting practices shape how minimum wage shocks propagate through the wage distribution. I analyze the effects of a binding minimum wage in a personnel economics model featuring two canonical compensation structures: rigid, job title based pay schedules and flexible, individualized pay. The same policy shock produces distinct spillover patterns depending on the firm’s compensation structure. Firms with rigid hierarchies preserve wage differentials by adjusting pay up the ladder, amplifying spillovers. Flexible systems, in contrast, limit such adjustments. Using linked employer–employee data from Portugal and two minimum wage hikes, I exploit variation in workers’ exposure and firms’ pay-setting practices to estimate spillover effects. These reach up to the median of the wage distribution and are driven primarily by firm responses rather than institutional constraints. Effects are about 30 percent larger in firms with rigid pay structures. The findings identify compensation practices as a key transmission channel through which minimum wage policy, and other shocks to relative pay, reshape the wage distribution.

This paper studies contract splitting - the act of splitting contracts into multiple smaller ones - as a mechanism of manipulation in public procurement. Leveraging the procurement administrative registry in Portugal and exploiting a reform that lowered discretion thresholds, we find that contract splitting is the main mechanism of manipulation. Buyers split to circumvent competitive requirements, more so for goods and services than for less divisible construction works. We discuss the implications of contract splitting for commonly used bunching estimators, documenting the existence of a splitting-induced bias.