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The Spanish cyclicality of the user cost of labour

Author

Listed:
  • Juan A. Sanchis-llopis

    (Universidad de Valencia and ERICES)

  • Antonio Cutanda

    (Universidad de Valencia)

Abstract

This paper contributes to the study of the Spanish unemployment puzzle: while unemployment and temporary employment rates are among the highest in the E.U., productivity is very low and wages show a rigidity similar to other European countries. We estimate the sensitivity of the user cost of labour (and wages) to aggregate unemployment (i.e., cyclicality), using a pseudo-panel built by combining two Spanish microeconomic surveys (the Labour Force Survey and the Family Expenditure and Income Survey) for the period 1987-1997. We find that the user cost of labour is more procyclical than average wages, what provides evidence of wage rigidity.

Suggested Citation

  • Juan A. Sanchis-llopis & Antonio Cutanda, 2020. "The Spanish cyclicality of the user cost of labour," Economics Bulletin, AccessEcon, vol. 40(3), pages 1893-1899.
    • Handle: RePEc:ebl:ecbull:eb-20-00051
    as

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    References listed on IDEAS

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    1. Bentolila, Samuel & Dolado, Juan J. & Jimeno, Juan F., 2008. "Does immigration affect the Phillips curve? Some evidence for Spain," European Economic Review, Elsevier, vol. 52(8), pages 1398-1423, November.
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    More about this item

    Keywords

    Cyclicality; user cost of labour; pseudo-panel data;
    All these keywords.

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment

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