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Does deregulation decrease unemployment? An empirical analysis of the Spanish labour market

Author

Listed:
  • Daniel HERRERO
  • Luis CÁRDENAS
  • Julián LÓPEZ GALLEGO

Abstract

Spain underwent two major labour reforms in 2010 and 2012 under the assumption that deregulating the labour market and decentralizing collective bargaining would automatically reduce unemployment (deregulation hypothesis). This article highlights the impact of demand and the sectoral structure of the economy to explain the behaviour of this variable (structural hypothesis). Analysing subnational panel data, the authors assess the capacity of these two hypotheses to explain unemployment trends. Their results cast doubt on the deregulation hypothesis and indicate the importance of cyclical and structural factors.

Suggested Citation

  • Daniel HERRERO & Luis CÁRDENAS & Julián LÓPEZ GALLEGO, 2020. "Does deregulation decrease unemployment? An empirical analysis of the Spanish labour market," International Labour Review, International Labour Organization, vol. 159(3), pages 367-396, September.
    • Handle: RePEc:bla:intlab:v:159:y:2020:i:3:p:367-396
    DOI: 10.1111/ilr.12179
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    References listed on IDEAS

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