Measuring Labour Market Dynamics: An Application To Spain (original) (raw)

The labor market in Spain, 2002–2016

IZA World of Labor, 2017

Despite the ongoing recovery, the Spanish labor market is still far from doing well. Youth unemployment as well as both temporary and long-term unemployment remain significant problems. Issues also exist with respect to immigrant workers and wage inequality, particularly for lower-wage workers. On the positive side, the labor force participation gender gap has shrunk considerably. Policymakers could combat the long-term unemployment challenge by putting more efforts into the design, implementation, and evaluation of well-targeted active labor market policies. Unemployment rate and real monthly wages ELEVATOR PITCH Spain, the fourth largest eurozone economy, was hit particularly hard by the Great Recession, which made its chronic labor market problems more evident. Youth and long-term unemployment escalated during the crisis and, despite the ongoing recovery, in 2016 were still at unsustainably high levels. The aggregate rate of temporary employment declined during the recession, but grew among youth. Most interesting have been the narrowing of the gender gap in labor force participation, the decline in the share of immigrants in employment and the labor force, and the overall increase in wage inequality.

The labor market in Spain, 2002–2018

IZA World of Labor

Despite the ongoing recovery, the Spanish labor market is still far from doing well. Youth unemployment as well as both temporary and long-term unemployment remain significant problems. Issues also exist with respect to immigrant workers and wage inequality, particularly for lower-wage workers. On the positive side, the labor force participation gender gap has shrunk considerably. Policymakers could combat the long-term unemployment challenge by putting more efforts into the design, implementation, and evaluation of well-targeted active labor market policies. ELEVATOR PITCH Spain, the fourth largest eurozone economy, was hit particularly hard by the Great Recession, which made its chronic labor market problems more evident. Youth and long-term unemployment escalated during the crisis and, despite the ongoing recovery, in 2018 were still at very high levels. The aggregate rate of temporary employment declined during the recession, but grew among youth. Most interesting have been the narrowing of the gender gap in labor force participation, the decline in the share of immigrants in employment and the labor force, and the overall increase in wage inequality. KEY FINDINGS Cons Youth and long-term unemployment skyrocketed during the Great Recession; in 2018 they were still both very high and very far from their pre-crisis levels. Male labor force participation fell because of the drastic reduction in young men's participation in the aftermath of the crisis. The rate of temporary employment escalated significantly among youth. Immigrants were hit particularly hard by the Great Recession. Real wages declined during the recession and have not returned yet to their pre-recession levels; this decline was especially pronounced for low-wage workers. Pros Employment has grown at an average annual rate of 2.4% since 2014. The gender gaps in labor force participation and temporary employment were smaller in 2018 than before the recession. The overall rate of temporary employment decreased in the wake of the Great Recession. The share of immigrant employment started growing again after 2014, albeit slowly. Both overall monthly wage inequality and inequality in the lower half of the monthly wage distribution started decreasing slowly in 2013.

Executive summary The Labour Market in Spain: Problems, Challenges and Future Trends 2

Despite a need for measures to ameliorate the impact of the labour market crisis, Spain is among the EU countries to have introduced the least number of improvements in recent years. On top of that, the severe structural reforms implemented have considerably worsened labour market access in the country, particularly for the most vulnerable groups, such as young people. The lack of accompanying measures to soften the effects of economic adjustment has worsened the position among the workforce and the unemployed alike. The immediate effect has been to accentuate Spain's economy was hit particularly hard by the financial crisis. After severe austerity measures have been implemented in recent years to contain a strong public debt increase, first signs of economic recovery are emerging. However, as SIM Europe results show, very few measures to soften the social consequences have been enacted. Spain scores second to last in the 'Labour Market Access' dimension of the Social Ju...

Wage dynamics in Spain: evidence from individual data (1994-2001)

Investigaciones Regionales - Journal of Regional Research, 2012

In this paper, we test the hypothesis of a wage curve against a Phillips curve for Spain, within a dynamic framework that allows for both of these, and for more general alternatives. To this end, we use data from the European Community Household Panel, providing micro-information for the period 1994-2001. The results indicate that, contrary to the situation in other European countries, the wage adjustment occurs in just one period, with the elasticity of wages to unemployment being close to the «empirical law of economics» of –0.1.

Wage adjustment in Spain: slow, inefficient and unfair?

Our analysis of microeconomic data between 2008 and 2013 suggests that the wage adjustment process in Spain, which began in earnest only in 2010, has been slow and inefficient and has hit temporary workers disproportionately hard. Whereas total employment fell by more than 16%, real aggregate wages in Spain fell by about 4.5% over the period 2008-2013. However, this aggregate figure masks a greater underlying reduction in individual wages, which occurred at the same time as changes in the composition of the employed population: as massive labour shedding was taking place, more tenured, more educated, and more qualified workers tended to be relatively less affected. Our analysis also looks into the implications for this adjustment of the high degree of segmentation of the Spanish labour market between workers with open-ended contracts and those with temporary ones. It emerges that temporary workers were both more likely to lose their jobs and more likely to suffer larger wage cuts. T...

Spanish Unemployment: The End of the Wild Ride?

SSRN Electronic Journal, 2003

Over the last quarter century, the Spanish unemployment rate has gone from 3.5% to 24% of the labor force, and then back to 13%. In this paper we describe this extraordinary evolution more in detail, discuss the main shocs and institutions behind it, and provide a set of policy implications derived from our analysis.

All precarious? Institutional change and turning points in labour market trajectories in Spain

Employee Relations, 2017

Purpose The purpose of this paper is to explore the effects of changes in employment regulation in Spain on individual labour market trajectories. It is well known that the Spanish labour market has been strongly hit by the 2007 recession. Furthermore, after 2010 and in the benchmark of “austerity”, several reforms were implemented to further flexibilise employment regulation. At the same time, public sector budgets suffered severe cutbacks, that impacted working conditions and prospects of public sector workers. These reforms were implemented by different governments and substantially changed previous existing patterns of employment. This paper explains how these reforms have reinforced previous existing trends towards greater flexibility and weaker employment protection and how they lead to a shift in the position of work in society. Design/methodology/approach The emerging patterns that these changes provoked are illustrated thorough data from narrative biographies of workers aff...

A tale of two neighbour economies: labour market dynamics in Portugal and Spain

Portugal and Spain are two neighbour economies which share many characteristics. However, Spanish unemployment more than doubles Portuguese unemployment. In this chapter we resort to structural VAR techniques to ascertain which shocks and what propagation mechanism underlie the functioning of the labours markets in both countries. Our results show that price adjustment is more sticky and that real wage flexibility is higher in Portugal. In line with this evidence, we find that, although shocks hitting both economies since the beginning of the eighties were not too dissimilar, their effects on unemployment were much more long-lasting in Spain than in Portugal.

Past, present and future of the Spanish labour market: when the pandemic meets the megatrends

Applied Economic Analysis, 2021

Purpose This paper aims to review the experience so far of the Spanish labour market during the Covid-19 crisis in the light of the existing institutions, its performance during past recessions and the policy measures adopted during the pandemic. Emphasis is placed on the role of worldwide trends in labour markets because of automation and artificial intelligence, in shaping a potential recovery of this (hopefully) transitory shock through a big reallocation process of employment and economic activity. It also highlights some innovations to employment and social policies needed to smooth the reallocation process and lessen the rise in inequality associated to technological trends. Design/methodology/approach Theory and empirics. Findings The Spanish labour market will subject to a great reallocation shock as a result of Covid-19 and secular technological changes. Reforms need to be undertaken. Originality/value An overview and some new results.