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

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Author Info
Bande, Roberto
Fernández, Melchor
Montuenga, Víctor

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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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Publisher 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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Related research
Keywords: Regional unemployment Disparities Business cycle Wage setting;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  20. Antolin, Pablo & Bover, Olympia, 1997. "Regional Migration in Spain: The Effect of Personal Characteristics and of Unemployment, Wage and House Price Differentials Using Pooled Cross-Sections," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 59(2), pages 215-35, May.
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Roberto Bande & Marika Karanassou, 2006. "Labour Market Flexibility and Regional Unemployment Rate Dynamics: Spain (1980-1995)," ERSA conference papers ersa06p53, European Regional Science Association. [Downloadable!]
    Other versions:
  2. Antonio Golpe & Andre van Stel, 2007. "Self-Employment and Unemployment in Spanish Regions in the Period 1979-2001," Jena Economic Research Papers in Economics 2007-021, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics, Thueringer Universitaets- und Landesbibliothek. [Downloadable!]
  3. GAMARRA, José R., 2006. "¿Cómo se comportan las tasas de desempleo en siete ciudades colombianas?," REVISTA DE ECONOMÍA DEL ROSARIO, UNIVERSIDAD DEL ROSARIO - FACULTAD DE ECONOMÍA. [Downloadable!]
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