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Explaining Youth Labor Market Problems in Spain: Crowding-Out, Institutions, or Technology Shifts?

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  • Juan José Dolado
  • Florentino Felgueroso
  • Juan F. Jimeno

Abstract

This paper examines the empirical evidence regarding the poor performance of the youth labor market in Spain over the last two decades, which entails very high unemployment for both higher and lower educated workers, symptoms of over-education, and low intensity of on-the-job training. It also presents a simple matching model with two types of workers (``educated and ''non-educated'') and two types of jobs (``skilled'' and ``unskilled''), under which educated workers may crowd-out non-educated workers from their traditional entry jobs, showing that a combination of an increase in the relative supply of higher educated worker and rigid labor market institutions harms the training and labor market prospects of lower educated workers, while it raises the proportion of higher educated workers performing low-skill jobs.

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Paper provided by FEDEA in its series Working Papers with number 2000-09.

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Handle: RePEc:fda:fdaddt:2000-09

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  1. Pissarides, Christopher A, 1994. "Search Unemployment with On-the-Job Search," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 61(3), pages 457-75, July.
  2. Dale T. Mortensen & Christopher A. Pissarides, 2002. "Taxes, Subsidies and Equilibrium Labor Market Outcomes," CEP Discussion Papers, Centre for Economic Performance, LSE dp0519, Centre for Economic Performance, LSE.
  3. Teulings, Coen & Koopmanschap, Marc, 1989. "An econometric model of crowding out of lower education levels," European Economic Review, Elsevier, Elsevier, vol. 33(8), pages 1653-1664, October.
  4. Mortensen, Dale T & Pissarides, Christopher A, 1994. "Job Creation and Job Destruction in the Theory of Unemployment," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 61(3), pages 397-415, July.
  5. Acemoglu, D, 1996. "Good Jobs Versus Bad Jobs : Theory and Some Evidence," Working papers, Massachusetts Institute of Technology (MIT), Department of Economics 96-33, Massachusetts Institute of Technology (MIT), Department of Economics.
  6. Pieter A. Gautier, 1999. "Unemployment and Search Externalities in a Model with Heterogeneous Jobs and Heterogeneous Workers," Tinbergen Institute Discussion Papers, Tinbergen Institute 99-075/3, Tinbergen Institute.
  7. Peter Gottschalk, 1997. "Inequality, Income Growth, and Mobility: The Basic Facts," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 11(2), pages 21-40, Spring.
  8. Nickell, Stephen & Bell, Brian, 1995. "The Collapse in Demand for the Unskilled and Unemployment across the OECD," Oxford Review of Economic Policy, Oxford University Press, Oxford University Press, vol. 11(1), pages 40-62, Spring.
  9. Snower, Dennis J., 1999. "Causes of Changing Earnings Inequality," IZA Discussion Papers 29, Institute for the Study of Labor (IZA).
  10. Ours, J.C. van & Ridder, G., 1995. "Job Matching and Job Competition: Are Lower Educated Workers at the Back of Job Queues?," Open Access publications from Tilburg University, Tilburg University urn:nbn:nl:ui:12-142162, Tilburg University.
  11. van Ours, J. C. & Ridder, G., 1995. "Job matching and job competition: Are lower educated workers at the back of job queues?," European Economic Review, Elsevier, Elsevier, vol. 39(9), pages 1717-1731, December.
  12. Ezequiel Uriel Jiménez & Pilar Beneito López & Javier Ferri Carreres & María Luisa Moltó Carbonell, 1996. "Desajuste educativo y formación laboral especializada: efectos sobre los rendimientos salariales," Working Papers. Serie EC, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) 1996-11, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  13. Dolado, Juan J. & Felgueroso, Florentino & Jimeno, Juan F., 1997. "The effects of minimum bargained wages on earnings: Evidence from Spain," European Economic Review, Elsevier, Elsevier, vol. 41(3-5), pages 713-721, April.
  14. James Albrecht & Susan Vroman, 2002. "A Matching Model with Endogenous Skill Requirements," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(1), pages 283-305, February.
  15. Alfonso Alba-Ramírez, 1993. "Mismatch in the Spanish Labor Market: Overeducation?," Journal of Human Resources, University of Wisconsin Press, University of Wisconsin Press, vol. 28(2), pages 259-278.
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Cited by:
  1. Juan F. Jimeno & Diego Rodríguez-Palenzuela, 2003. "Youth Unemployment in the OECD: Demographic Shifts, Labour Market Institutions and Macroeconomic Shocks," Economics Working Papers, European Network of Economic Policy Research Institutes 019, European Network of Economic Policy Research Institutes.
  2. Florentino Felgueroso & Sergi Jiménez Martín, 2009. "The "New Growth Model". How and with Whom?," Working Papers, FEDEA 2009-39, FEDEA.
  3. Neugart, Michael & Storrie, Donald, 2002. "Temporary work agencies and equilibrium unemployment," Working Papers in Economics, University of Gothenburg, Department of Economics 83, University of Gothenburg, Department of Economics.
  4. Josep Oliver Alonso & José Luís Raymond Bara & Hector Sala Lorda, 2001. "Necesidad de formación en el mercado de trabajo español: composición del empleo y estructura productiva," Working Papers, Department of Applied Economics at Universitat Autonoma of Barcelona wp0117, Department of Applied Economics at Universitat Autonoma of Barcelona.
  5. Budria, Santiago, 2006. "Education and Inequality: Evidence from Spain," MPRA Paper 1098, University Library of Munich, Germany.
  6. Juan F. Jimeno, . "Demografía, empleo, salarios y pensiones," Working Papers, FEDEA 2002-04, FEDEA.

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