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The "New Growth Model". How and with Whom?

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  • Florentino Felgueroso
  • Sergi Jiménez Martín

Abstract

After the early 90s crisis, Spain had a long period of prosperity that ended abruptly with the recent global crisis. What many did not realized is that Spain, by following a different growth trajectory than a majority of the EU15 countries, was choosing a wrong detour. In this paper, we argue that the growth path chosen in early 90s lead to a wrong accumulation of human capital and technological skills in order to adopt ICT technologies. The adverse demographic structure (the significant decrease in the size of the young cohorts), the dual composition of the population by educational levels (high share of people with low and high educational attainment, and a very low share of medium attainment) and the huge and rapid increase of female participation rates have been key factors in this process. In particular, and in contrast with a majority of the EU15 countries, dropout rates and computer illiteracy have remain high, favoring growth in low skills low productivity sectors and hurting employment opportunities in knowledge intensive sectors. Moreover, the lack of people with medium educational attainment has also been responsible for a growing mismatch of the high-educated population. The recent crisis has to be viewed as an opportunity to get back to the correct growth track, by reducing incentives to dropout and by favoring skill adjustment. Targeted schooling (to reduce dropout) and training (to increase ICT literacy of medium age and older cohorts) should be priority policies aimed at increasing productivity in the old sectors, creating employment in intensive ICT services sectors and covering the huge gap in professional and technicians in comparison to other EU15 countries. However, some factors that have slowed the adoption of new technologies in the recent past will persist in the coming decade. In particular, the significant decrease of the cohorts of young entrants and the educational path dependencies should continue to act as resilience factors to implement the reforms required to stimulate the change in the growth model. Furthermore, the permanent mismatch of the most abundant university cohorts (those who graduated around the mid-90s), also constitutes a brake on change, given the drastic decline in new graduates in the near future. Thus, policies focused on young second-generation of immigrants and incentives to the entry of skilled immigrants should also be considered.

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Bibliographic Info

Paper provided by FEDEA in its series Working Papers with number 2009-39.

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Date of creation: Dec 2009
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Handle: RePEc:fda:fdaddt:2009-39

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References

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  1. Elhanan Helpman & Antonio Rangel, 1998. "Adjusting to a New Technology: Experience and Training," Harvard Institute of Economic Research Working Papers, Harvard - Institute of Economic Research 1833, Harvard - Institute of Economic Research.
  2. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1998. "Computing Inequality: Have Computers Changed The Labor Market?," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 113(4), pages 1169-1213, November.
  3. Dolado, Juan J. & Felgueroso, Florentino, 2008. "Occupational Mismatch and Moonlighting Among Spanish Physicians: Do Couples Matter?," CEPR Discussion Papers, C.E.P.R. Discussion Papers 6803, C.E.P.R. Discussion Papers.
  4. Robert Shimer, 1999. "The Impact of Young Workers on the Aggregate Labor Market," NBER Working Papers 7306, National Bureau of Economic Research, Inc.
  5. Juan José Dolado & Florentino Felgueroso & Juan F. Jimeno, . "Explaining Youth Labor Market Problems in Spain: Crowding-Out, Institutions, or Technology Shifts?," Working Papers 2000-09, FEDEA.
  6. Katz, L.F. & Murphy, K.M., 1991. "Changes in Relative Wages, 1963-1987: Supply and Demand Factors," Harvard Institute of Economic Research Working Papers, Harvard - Institute of Economic Research 1580, Harvard - Institute of Economic Research.
  7. Weinberg, Bruce A., 2004. "Experience and Technology Adoption," IZA Discussion Papers 1051, Institute for the Study of Labor (IZA).
  8. Roberto M. Samaniego, 2006. "Employment Protection and High-Tech Aversion," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 9(2), pages 224-241, April.
  9. Dolado, Juan J. & Felgueroso, Florentino & Jimeno, Juan F., 2000. "Youth labour markets in Spain: Education, training, and crowding-out," European Economic Review, Elsevier, Elsevier, vol. 44(4-6), pages 943-956, May.
  10. Mas, Matilde & Milana, Carlo & Serrano, Lorenzo, 2008. "Spain and Italy: Catching up and falling behind. Two different tales of productivity slowdown," MPRA Paper 15834, University Library of Munich, Germany, revised 2008.
  11. Murphy, Kevin M & Welch, Finis, 1990. "Empirical Age-Earnings Profiles," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 8(2), pages 202-29, April.
  12. van Ark, Bart & Inklaar, Robert, 2006. "Catching up or getting stuck? Europe's troubles to exploit ICT's productivity potential," GGDC Research Memorandum, Groningen Growth and Development Centre, University of Groningen GD-79, Groningen Growth and Development Centre, University of Groningen.
  13. Inklaar, Robert & Timmer, Marcel P., 2008. "GGDC Productivity Level Database: International Comparisons of Output, Inputs and Productivity at the Industry Level," GGDC Research Memorandum, Groningen Growth and Development Centre, University of Groningen GD-104, Groningen Growth and Development Centre, University of Groningen.
  14. David Card & Thomas Lemieux, 2000. "Can Falling Supply Explain the Rising Return to College for Younger Men? A Cohort-Based Analysis," NBER Working Papers 7655, National Bureau of Economic Research, Inc.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Los retos de empleo del nuevo gobierno (2): Objetivo 2020
    by Florentino Felgueroso in Nada Es Gratis on 2011-11-01 00:33:51
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Cited by:
  1. Benigno, Gianluca & Fornaro, Luca, 2013. "The Financial Resource Curse," CEPR Discussion Papers, C.E.P.R. Discussion Papers 9489, C.E.P.R. Discussion Papers.
  2. Florentino Felgueroso & Maria Gutiérrez-Domènech & Sergi Jiménez-Martín, 2014. "Dropout trends and educational reforms: the role of the LOGSE in Spain," IZA Journal of Labor Policy, Springer, Springer, vol. 3(1), pages 1-24, December.
  3. Felgueroso, Florentino & Gutiérrez-Domenech, María & Jiménez Martín, Sergi, 2013. "¿Por qué el abandono escolar se ha mantenido tan elevado en España en las últimas dos décadas? El papel de la Ley de Educación (LOGSE)," Economic Reports 02-2013, FEDEA.

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