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

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Author Info

  • Dolado, Juan J.

    ()
    (Universidad Carlos III de Madrid)

  • Felgueroso, Florentino

    ()
    (Universidad de Oviedo)

  • Jimeno, Juan F.

    ()
    (Bank of Spain)

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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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 142.

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Length: 41 pages
Date of creation: Apr 2000
Date of revision:
Publication status: published in: European Economic Review, 2000, 44 (4-6), 943-956
Handle: RePEc:iza:izadps:dp142

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Keywords: crowding-out; returns to education; matching;

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References

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  1. Dale T. Mortensen & Christopher A. Pissarides, 1993. "Job Creation and Job Destruction in the Theory of Unemployment," CEP Discussion Papers dp0110, Centre for Economic Performance, LSE.
  2. 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 urn:nbn:nl:ui:12-142162, Tilburg University.
  3. 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.
  4. 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.
  5. Dale T. Mortensen & Christopher A. Pissarides, 2002. "Taxes, Subsidies and Equilibrium Labor Market Outcomes," CEP Discussion Papers dp0519, Centre for Economic Performance, LSE.
  6. 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.
  7. 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.
  8. Alfonso Alba-Ramírez, 1993. "Mismatch in the Spanish Labor Market: Overeducation?," Journal of Human Resources, University of Wisconsin Press, vol. 28(2), pages 259-278.
  9. Acemoglu, Daron, 1997. "Good Jobs versus Bad Jobs: Theory and Some Evidence," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1588, C.E.P.R. Discussion Papers.
  10. Peter Gottschalk, 1997. "Inequality, Income Growth, and Mobility: The Basic Facts," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 21-40, Spring.
  11. 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).
  12. 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.
  13. Dennis J. Snower, 1998. "Causes of changing earnings inequality," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, Federal Reserve Bank of Kansas City, pages 69-133.
  14. 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.
  15. Pieter A. Gautier, 1999. "Unemployment and Search Externalities in a Model with Heterogeneous Jobs and Heterogeneous Workers," Tinbergen Institute Discussion Papers 99-075/3, Tinbergen Institute.
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Cited by:
  1. Juan F. Jimeno & Diego Rodríguez-Palenzuela, . "Youth unemployment in the OECD: Demographic shifts, labour market institutions, and macroeconomic shocks," Working Papers 2002-15, FEDEA.
  2. Juan F. Jimeno & Diego Rodríguez-Palenzuela, 2003. "Youth Unemployment in the OECD: Demographic Shifts, Labour Market Institutions and Macroeconomic Shocks," Economics Working Papers 019, European Network of Economic Policy Research Institutes.
  3. Neugart, Michael & Storrie, Donald, 2002. "Temporary work agencies and equilibrium unemployment," Discussion Papers, Research Unit: Labor Market Policy and Employment FS I 02-203, Social Science Research Center Berlin (WZB).
  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 wp0117, Department of Applied Economics at Universitat Autonoma of Barcelona.
  5. Florentino Felgueroso & Sergi Jiménez Martín, 2009. "The "New Growth Model". How and with Whom?," Working Papers 2009-39, FEDEA.

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