Advanced Search
MyIDEAS: Login

Wage flexibility and local labour markets: homogeneity of the wage curve in Spain

Contents:

Author Info

  • Roberto Bande Ramudo

    ()

  • Melchor Fernández Fernández

    (GAME-IDEGA, University of Santiago de Compostela)

  • Víctor Montuenga Gómez

    (University of Zaragoza)

Abstract

In this paper we analyze wage flexibility in Spain and its regional differences, departing from the estimation of wage curves. Using data from the Wage Structure Survey, we proceed to estimate regional wage equations, relating the observed wage received by workers to a group of personal and job characteristics, as well as to the unemployment rate. This analysis allows us to test for the existence of regional differences in the degree of wage flexibility, which may have an important influence in the evolution of regional unemployment, given its impact on the ability of the local labour market to absorb negative shocks. Estimated results indicate that regions suffering from higher unemployment rates exhibit lower wage flexibility. Collective bargaining reforms should pursue greater wage flexibility, especially in regions with high rates of joblessness.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://otega.usc.es/docs_idega/documentos_de_traballo/analise_economica/analise_economica_44.pdf
File Function: First version
Download Restriction: no

Bibliographic Info

Paper provided by IDEGA - Instituto Universitario de Estudios e Desenvolvemento de Galicia in its series Documentos de trabajo - Analise Economica with number 0044.

as in new window
Length: 31 pages
Date of creation: 2011
Date of revision:
Handle: RePEc:edg:anecon:0044

Contact details of provider:
Postal: Chalé dos Catedráticos, 1. Avda. das Ciencias s/n. Campus Vida, 15782 Santiago de Compostela
Phone: 981 59 11 66
Fax: 981 59 99 35
Email:
Web page: http://www.usc.es/idega/
More information through EDIRC

Related research

Keywords: Wage flexibility; wage curve; Wage Structure Survey; Spain; regional unemployment;

Other versions of this item:

Find related papers by JEL classification:

References

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.:
as in new window
  1. Olivier Blanchard & Justin Wolfers, 1999. "The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence," NBER Working Papers 7282, National Bureau of Economic Research, Inc.
  2. Bande, Roberto & Fernández, Melchor & Montuenga, Víctor, 2008. "Regional unemployment in Spain: Disparities, business cycle and wage setting," Labour Economics, Elsevier, vol. 15(5), pages 885-914, October.
  3. Luca Nunziata, 2002. "Unemployment, Labour Market Institutions and Shocks," Economics Series Working Papers 2002-W16, University of Oxford, Department of Economics.
  4. Zhongmin Wu, 2004. "Wage curve for urban China: a panel data approach," Applied Economics Letters, Taylor & Francis Journals, vol. 11(7), pages 425-428.
  5. Philip Arestis & Michelle Baddeley & Malcolm Sawyer, 2007. "The Relationship Between Capital Stock, Unemployment And Wages In Nine Emu Countries," Bulletin of Economic Research, Wiley Blackwell, vol. 59(2), pages 125-148, 04.
  6. Montuenga, Victor & Garcia, Inmaculada & Fernandez, Melchor, 2003. "Wage flexibility: evidence from five EU countries based on the wage curve," Economics Letters, Elsevier, vol. 78(2), pages 169-174, February.
  7. Thiess Buettner, 1999. "The effect of unemployment, aggregate wages, and spatial contiguity on local wages: An investigation with German district level data," Papers in Regional Science, Springer, vol. 78(1), pages 47-67.
  8. Samuel Bentolila & Juan J. Dolado & Juan F. Jimeno, 2007. "Does Immigration Affect The Phillips Curve? Some Evidence For Spain," Working Papers wp2007_0718, CEMFI.
  9. Samuel Bentolila & Juan F. Jimeno, . "Spanish Unemployment: The End of the Wild Ride?," Working Papers 2003-10, FEDEA.
  10. Karsten Albaek & Rita Asplund & Erling Barth & Stig Blomskog & Bjorn Runar Gudmundsson & Vifill Karlsson & Erik Strojer Madsen, 2000. "Dimensions of the Wage-Unemployment Relationship in the Nordic Countries: Wage Flexibility Without Wage Curves," Econometric Society World Congress 2000 Contributed Papers 1893, Econometric Society.
  11. Marika Karanassou & Hector Sala & Pablo F. Salvador, 2007. "Capital Accumulation and Unemployment: New Insights on the Nordic Experience," Working Papers 611, Queen Mary, University of London, School of Economics and Finance.
  12. Anna Iara & Iulia Traistaru, 2004. "How Flexible are Wages in EU Accession Countries?," ERSA conference papers ersa04p191, European Regional Science Association.
  13. Martin Falk & Thomas Leoni, 2011. "Estimating the Wage Curve with Spatial Effects and Spline Functions," Economics Bulletin, AccessEcon, vol. 31(1), pages 591-604.
  14. Baltagi, Badi H. & Blien, Uwe & Wolf, Katja, 2009. "New evidence on the dynamic wage curve for Western Germany: 1980-2004," Labour Economics, Elsevier, vol. 16(1), pages 47-51, January.
  15. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June.
  16. Olivier Jean Blanchard & Lawrence Katz, 1999. "Wage Dynamics: Reconciling Theory and Evidence," NBER Working Papers 6924, National Bureau of Economic Research, Inc.
  17. Peter Nijkamp & Jacques Poot, 2002. "The Last Word on the Wage Curve?," Tinbergen Institute Discussion Papers 02-029/3, Tinbergen Institute, revised 13 Mar 2003.
  18. Víctor M. Montuenga-Gómez & José M. Ramos-Parreño, 2005. "Reconciling the Wage Curve and the Phillips Curve," Journal of Economic Surveys, Wiley Blackwell, vol. 19(5), pages 735-765, December.
  19. Layard, Richard & Nickell, Stephen & Jackman, Richard, 1991. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780198284345.
  20. Martin Werding (ed.), 2006. "Structural Unemployment in Western Europe: Reasons and Remedies," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262232464, January.
  21. Robert A. Hart, 2003. "Overtime Working, The Phillips Curve And The Wage Curve: British Engineering, 1926-66," Manchester School, University of Manchester, vol. 71(2), pages 97-112, 03.
  22. Samuel Bentolila & Juan Jose Dolado & Juan F. Jimeno, 2008. "Two-tier Employment Protection Reforms: The Spanish Experience," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 6(4), pages 49-56, December.
  23. Blanchflower, David G & Oswald, Andrew J, 1994. "Estimating a Wage Curve for Britain: 1973-90," Economic Journal, Royal Economic Society, vol. 104(426), pages 1025-43, September.
  24. Jimeno, Juan F. & Bentolila, Samuel, 1998. "Regional unemployment persistence (Spain, 1976-1994)," Labour Economics, Elsevier, vol. 5(1), pages 25-51, March.
  25. Nickell, S., 1991. "Wages, Unemployment and Population Change," Economics Series Working Papers 99122, University of Oxford, Department of Economics.
  26. Andreas Ammermuller & Claudio Lucifora & Federica Origo & Thomas Zwick, 2010. "Wage Flexibility in Regional Labour Markets: Evidence from Italy and Germany," Regional Studies, Taylor & Francis Journals, vol. 44(4), pages 401-421.
  27. J. Paul Elhorst, 2003. "The Mystery of Regional Unemployment Differentials: Theoretical and Empirical Explanations," Journal of Economic Surveys, Wiley Blackwell, vol. 17(5), pages 709-748, December.
  28. Blanchflower, David G. & Oswald, Andrew J., 2005. "The Wage Curve Reloaded," IZA Discussion Papers 1665, Institute for the Study of Labor (IZA).
  29. Moulton, Brent R., 1986. "Random group effects and the precision of regression estimates," Journal of Econometrics, Elsevier, vol. 32(3), pages 385-397, August.
  30. von Hagen, Jürgen & Traistaru, Iulia, 2004. "Macroeconomic adjustment in the new EU member states," ZEI Working Papers B 01-2005 [rev.], ZEI - Center for European Integration Studies, University of Bonn.
  31. G Johnes, 2005. "The wage curve revisited: estimates from a UK panel," Working Papers 573979, Lancaster University Management School, Economics Department.
  32. Jackman, Richard & Layard, Richard, 1991. "Does Long-term Unemployment Reduce a Person's Chance of a Job? A Time-Series Test," Economica, London School of Economics and Political Science, vol. 58(229), pages 93-106, February.
  33. Marston, Stephen T, 1985. "Two Views of the Geographic Distribution of Unemployment," The Quarterly Journal of Economics, MIT Press, vol. 100(1), pages 57-79, February.
  34. Winter-Ebmer, Rudolf, 1996. "Wage curve, unemployment duration and compensating differentials," Labour Economics, Elsevier, vol. 3(4), pages 425-434, December.
  35. AlbÆk, Karsten & Asplund, Rita & Blomskog, Stig & Barth, Erling & GuÐmundsson, Björn Runar & Karlsson, Vifill & Madsen, Erik, 2002. "Dimensions of the Wage-dimensions Relationship in the Nordic Countries: Wage Flexibility without Wage Curves," Discussion Papers 698, The Research Institute of the Finnish Economy.
  36. Roberto Basile & Luca De Benedictis, 2008. "Regional unemployment and productivity in Europe," Papers in Regional Science, Wiley Blackwell, vol. 87(2), pages 173-192, 06.
  37. Lopez-Bazo, Enrique & Del Barrio, Tomas & Artis, Manuel, 2002. "The regional distribution of spanish unemployment. A spatial analysis," ERSA conference papers ersa02p020, European Regional Science Association.
  38. Eichhorst, Werner & Feil, Michael & Braun, Christoph, 2008. "What have we learned? Assessing labor market institutions and indicators," IAB Discussion Paper 200822, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  39. Blanchflower, D. & Oswald, A., 1989. "The Wage Curve," Papers 340, London School of Economics - Centre for Labour Economics.
  40. Blanchflower, David G., 2001. "Unemployment, Well-Being, and Wage Curves in Eastern and Central Europe," Journal of the Japanese and International Economies, Elsevier, vol. 15(4), pages 364-402, December.
  41. Lucio R. Pench & Paolo Sestito & Elisabetta Frontini, 1999. "Some unpleasant arithmetics of regional unemployment in the EU. Are there any lessons for EMU?," European Economy - Economic Papers 134, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
  42. Barth, Erling & Bratsberg, Bernt & Naylor, Robin A. & Raaum, Oddbjørn, 2002. "Explaining Variations in Wage Curves: Theory and Evidence," Memorandum 03/2002, Oslo University, Department of Economics.
  43. Ilias Livanos, 2010. "The Wage-Local Unemployment Relationship in a Highly Regulated Labour Market: Greece," Regional Studies, Taylor & Francis Journals, vol. 44(4), pages 389-400.
  44. van der Meulen Rodgers, Yana & Nataraj, Sita, 1999. "Labor Market Flexibility in East Asia: Lessons from Taiwan," Economic Development and Cultural Change, University of Chicago Press, vol. 48(1), pages 51-69, October.
  45. Brunello, Giorgio & Lupi, Claudio & Ordine, Patrizia, 2001. "Widening differences in Italian regional unemployment," Labour Economics, Elsevier, vol. 8(1), pages 103-129, January.
  46. Ching-to Albert Ma & Andrew M. Weiss, 1990. "A Signaling Theory of Unemployment," NBER Working Papers 3565, National Bureau of Economic Research, Inc.
  47. Richard Layard & Stephen Nickell, 1992. "Unemployment in the OECD Countries," CEP Discussion Papers dp0081, Centre for Economic Performance, LSE.
  48. Morrison, Philip S. & Papps, Kerry L. & Poot, Jacques, 2006. "Wages, employment, labour turnover and the accessibility of local labour markets," Labour Economics, Elsevier, vol. 13(5), pages 639-663, October.
  49. Víctor Montuenga & Inmaculada García & Melchor Fernández, 2006. "Regional Wage Flexibility: the Wage Curve in Five EU Countries," AIEL Series in Labour Economics, in: Floro Ernesto Caroleo & Sergio Destefanis (ed.), The European Labour Market. Regional Dimensions, edition 1, chapter 12, pages 245-265 AIEL - Associazione Italiana Economisti del Lavoro.
  50. Kennedy, Steven & Borland, Jeff, 2000. "A Wage Curve for Australia?," Oxford Economic Papers, Oxford University Press, vol. 52(4), pages 774-803, October.
  51. Melchor Fernandez & Victor Montuenga & Roberto Bande, 2009. "Las tasas de paro regionales españolas: convergencia o polarización," Documentos de trabajo - Analise Economica 0040, IDEGA - Instituto Universitario de Estudios e Desenvolvemento de Galicia.
  52. Janssens, Stefan & Konings, Jozef, 1998. "One more wage curve: the case of Belgium," Economics Letters, Elsevier, vol. 60(2), pages 223-227, August.
  53. Roberto Bande & Melchor Fernandez & Victor Montuenga, 2007. "Regional Disparities in the Unemployment Rate: The Role of the Wage-setting Mechanism in Spain, 1987-92," Regional Studies, Taylor & Francis Journals, vol. 41(2), pages 235-251.
  54. Campbell, Carl & Orszag, J. Michael, 1998. "A model of the wage curve," Economics Letters, Elsevier, vol. 59(1), pages 119-125, April.
  55. Aragon, Y. & Haughton, D. & Haughton, J. & Leconte, E. & Malin, E. & Ruiz-Gazen, A. & Thomas-Agnan. C., 1999. "Explaining the Pattern of Regional Unemployment: the Case of the Midi-Pyrenees Region," Papers 99.519, Toulouse - GREMAQ.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:edg:anecon:0044. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Manuel Fernandez Grela).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.