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Labour market dynamics in Spanish regions: Evaluating asymmetries in troublesome times

The Spanish labour market disproportionately booms in expansions and bursts in recessions; meanwhile, its regions’ relative position persists: those with the highest unemployment rates in 1996 were also in the worse position in 2012. To examine this twofold feature, we apply Blanchard and Katz’s (Brookings Pap Econ Act 1:1-75, 1992) methodology and evaluate how the Spanish labour market reacts to regional employment shocks in a variety of cases. Shock responses are channelled via changes in unemployment, labour market participation, and spatial mobility. Our results provide evidence of asymmetric responses across business cycle phases (1996-2007 and 2008-2012). While changes in participation rates are the main adjustment mechanism in expansion, unemployment and spatial mobility become the central ones in recession. We also provide evidence of real wage rigidities in both periods, due to rigidities in both nominal wages and consumer prices. We conclude with a cluster analysis showing that high and low unemployment regions have similar responses in the short-run while, in the long-run, the former are more reactive in terms of spatial mobility. Overall, we provide evidence that people in a region are more willing to migrate (relative to the national average) when a regional shock occurs in relatively worse economic contexts

SpringerOpen

Author: Sala, Hector
Trivin Garcia, Pedro
Date: 2018 June 5
Abstract: The Spanish labour market disproportionately booms in expansions and bursts in recessions; meanwhile, its regions’ relative position persists: those with the highest unemployment rates in 1996 were also in the worse position in 2012. To examine this twofold feature, we apply Blanchard and Katz’s (Brookings Pap Econ Act 1:1-75, 1992) methodology and evaluate how the Spanish labour market reacts to regional employment shocks in a variety of cases. Shock responses are channelled via changes in unemployment, labour market participation, and spatial mobility. Our results provide evidence of asymmetric responses across business cycle phases (1996-2007 and 2008-2012). While changes in participation rates are the main adjustment mechanism in expansion, unemployment and spatial mobility become the central ones in recession. We also provide evidence of real wage rigidities in both periods, due to rigidities in both nominal wages and consumer prices. We conclude with a cluster analysis showing that high and low unemployment regions have similar responses in the short-run while, in the long-run, the former are more reactive in terms of spatial mobility. Overall, we provide evidence that people in a region are more willing to migrate (relative to the national average) when a regional shock occurs in relatively worse economic contexts
Document access: http://hdl.handle.net/2072/319963
Language: eng
Publisher: SpringerOpen
Rights: Reconeixement-NoComercial 4.0 Espanya
Rights URI: http://creativecommons.org/licenses/by-nc/4.0/es
Subject: Atur
Unemployment
Mercat de treball
Labor market
Ocupació
Employment (Economic theory)
Title: Labour market dynamics in Spanish regions: Evaluating asymmetries in troublesome times
Type: info:eu-repo/semantics/article
Repository: Recercat

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