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Business Cycle Effects on Labour Force Transitions for Older People in Spain

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  • Sergi Jiménez Martín
  • Judit Vall Castello

Abstract

This paper analyses the determinants of observed exits from employment for people aged 45-59 years old in the context of the Spanish labour market in 1981-2006. The main aim of the paper is to identify the effect of the business cycle (BC) on the timing and the type of exit route out of the labour force. We proceed in two stages. In the first stage, we study the determinants of exits from employment to non-employment. In the second, we take into account the fact that there are several competing exit routes (unemployment, disability or inactivity) and estimate a competing risk model to evaluate how important BC conditions are in determining the respective exit probabilities. We make use of the recently released Muestra Continua de Vidas Laborales to estimate discrete time hazard regression models. We match this information with a number of variables constructed with macroeconomic data derived from the Instituto Nacional de Estadistica to measure growth and employability performance of different economic sectors and regions in Spain in order to capture the variation in the business cycle between times, sectors and regions. Time-varying covariates are also included in the analysis to model the monetary incentives provided by the system. We find that both BC conditions and a number of special schemes included in the unemployment and disability legislation affect the exit timing and also the choice of the route out of the labour market.

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Bibliographic Info

Paper provided by FEDEA in its series Working Papers with number 2009-25.

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Date of creation: Jul 2009
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Handle: RePEc:fda:fdaddt:2009-25

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  1. repec:ese:iserwp:2006-20 is not listed on IDEAS
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  3. Olympia Bover & Manuel Arellano & Samuel Bentolila, 2002. "Unemployment Duration, Benefit Duration and the Business Cycle," Economic Journal, Royal Economic Society, vol. 112(479), pages 223-265, April.
  4. Sergi Jiménez-Martín & José M. Labeaga & Cristina Vilaplana Prieto, . "A sequential model for older workers’ labor transitions after a health shock," Working Papers 2005-23, FEDEA.
  5. Blau, David M, 1994. "Labor Force Dynamics of Older Men," Econometrica, Econometric Society, vol. 62(1), pages 117-56, January.
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  9. José Ignacio García Pérez & Yolanda Rebollo Sanz, 2004. "Wage changes through job mobility in Europe: A multinomial endogenous switching approach," Economic Working Papers at Centro de Estudios Andaluces E2004/70, Centro de Estudios Andaluces.
  10. Costas Meghir & Whitehouse, E, 1995. "Labour market transitions and retirement of men in the UK," IFS Working Papers W95/10, Institute for Fiscal Studies.
  11. José Ignacio García & Alfonso R. Sánchez Martín, 2008. "Social security and the search behaviour of workers approaching retirement," Economic Working Papers at Centro de Estudios Andaluces E2008/10, Centro de Estudios Andaluces.
  12. Michele Boldrin & Sergi Jimenez-Martni & Franco Peracchi, 1997. "Social Security and Retirement in Spain," NBER Working Papers 6136, National Bureau of Economic Research, Inc.
  13. Stephen P. Jenkins & Carlos GarcÌa-Serrano, 2004. "The Relationship between Unemployment Benefits and Re-employment Probabilities: Evidence from Spain," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 66(2), pages 239-260, 05.
  14. Raquel Vegas & Isabel Argimón & Marta Botella & Clara I. González, 2009. "Retirement behaviour and retirement incentives in Spain," Banco de Espa�a Working Papers 0913, Banco de Espa�a.
  15. José Ignacio García Pérez & Yolanda Rebollo Sanz, 2005. "The use of permanent and temporary jobs across Spanish regions: Do unit labour cost differentials offer an explanation?," Economic Working Papers at Centro de Estudios Andaluces E2005/16, Centro de Estudios Andaluces.
  16. David Haardt, 2007. "Transitions Out Of and Back To Employment among Older Men and Women in the UK," Social and Economic Dimensions of an Aging Population Research Papers 197, McMaster University.
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Citations

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Cited by:
  1. Olivier Marie & Judit Vall Castello, 2011. "Measuring the (Income) Effect of Disability Insurance Generosity on Labour Market Participation," CEP Discussion Papers dp1094, Centre for Economic Performance, LSE.
  2. Silva, José I. & Vall-Castello, Judit, 2012. "Evaluating the Impact of a Reduction in the Generosity of Disability Benefits: The 2008 Spanish Reform," IZA Discussion Papers 6482, Institute for the Study of Labor (IZA).
  3. Judit Vall Castello, 2010. "Promoting Employment of Disabled Women in Spain; Evaluating a Policy," Working Papers 2010-10, FEDEA.
  4. Isabel Cairó-Blanco, 2010. "An empirical analysis of retirement behaviour in Spain: partial versus full retirement," SERIEs, Spanish Economic Association, vol. 1(3), pages 325-356, July.

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