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Regional unemployment in Spain: Disparities, business cycle and wage setting

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  • Bande, Roberto
  • Fernández, Melchor
  • Montuenga, Víctor

Abstract

The existence and persistence of regional disparities in the unemployment rate is a common problem of many European economies. However, in Spain, this situation exhibits a characteristic feature: a strong positive relationship with the business cycle. The analysis in this paper investigates the relationship between this distinguishing feature of the Spanish economy and changes in the regional wage-setting mechanism, and how this relationship has influenced the aggregate Spanish labour market performance in the recent past. The empirical finding of an important regional imitation effect in wage bargaining may explain both the persistence of disparities, and the positive relationship between regional unemployment dispersion and the business cycle. This result has a direct implication for employment policies, which must take into account the regional dimension of the unemployment problem.

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Bibliographic Info

Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 15 (2008)
Issue (Month): 5 (October)
Pages: 885-914

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Handle: RePEc:eee:labeco:v:15:y:2008:i:5:p:885-914

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Web page: http://www.elsevier.com/locate/labeco

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Keywords: Regional unemployment Disparities Business cycle Wage setting;

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References

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Citations

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Cited by:
  1. Roberto Bande & Marika Karanassou, 2006. "Labour Market Flexibility and Regional Unemployment Rate Dynamics: Spain 1980-1995," Working Papers 574, Queen Mary, University of London, School of Economics and Finance.
  2. Grigoryeva, Nadezhda, 2012. "The Problem Of Youth Unemployment in Rural Area," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 4(1), March.
  3. Bande, Roberto & Karanassou, Marika, 2011. "The NRU and the Evolution of Regional Disparities in Spanish Unemployment," IZA Discussion Papers 5838, Institute for the Study of Labor (IZA).
  4. Victor Montuenga & Roberto Bande & Melchor Fernandez, 2011. "Wage flexibility and local labour markets: homogeneity of the wage curve in Spain," ERSA conference papers ersa11p414, European Regional Science Association.
  5. Roberto Bande & Marika Karanassou, 2010. "Spanish Regional Unemployment Revisited: The Role of Capital Accumulation," Working Papers 666, Queen Mary, University of London, School of Economics and Finance.
  6. Andrea ÉLTETÕ, 2011. "The economic crisis and its management in Spain," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 2, pages 41-55, June.
  7. Ismael Ahamdanech Zarco & Carmelo García Pérez & Hipólito Simón Pérez, 2010. "Wage inequality in Spain: A regional perspective," Working Papers 2010/24, Institut d'Economia de Barcelona (IEB).
  8. Sala, Hector & Trivín, Pedro, 2013. "Labour Market Dynamics in Spanish Regions: Evaluating Asymmetries in Troublesome Times," IZA Discussion Papers 7746, Institute for the Study of Labor (IZA).
  9. Schmillen, Achim & Möller, Joachim, 2012. "Distribution and determinants of lifetime unemployment," Labour Economics, Elsevier, vol. 19(1), pages 33-47.
  10. José R. Gamarra, 2006. "¿Cómo se comportan las tasas de desempleo en siete ciudades colombianas?," REVISTA DE ECONOMÍA DEL ROSARIO, UNIVERSIDAD DEL ROSARIO.
  11. Camilo Alberto Cárdenas Hurtado & María Alejandra Hernández Montes & Jhon Edwar Torres Gorron, 2014. "An Exploratory Analysis of Heterogeneity on Regional Labour Markets and Unemployment Rates in Colombia: An MFACT approach," Borradores de Economia 802, Banco de la Republica de Colombia.
  12. Enrique López-Bazo & Elisabet Motellón, 2011. "The regional distribution of unemployment. A microeconomic perspective," ERSA conference papers ersa11p1128, European Regional Science Association.
  13. Antonio Golpe & Andre van Stel, 2007. "Self-Employment and Unemployment in Spanish Regions in the Period 1979-2001," Jena Economic Research Papers 2007-021, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.

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