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Labour market dynamics in Spanish regions: evaluating asymmetries in troublesome times

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  • Hector Sala

    ()

  • Pedro Trivín

    ()

Abstract

The Spanish labour market disproportionately booms in expansions and bursts in recessions; meanwhile, its regions’ relative position persists: those with the highest unemployment rates in 1996 were also in the worse position in 2012. To examine this twofold feature, we apply Blanchard and Katz’s (Brookings Pap Econ Act 1:1–75, 1992 ) methodology and evaluate how the Spanish labour market reacts to regional employment shocks in a variety of cases. Shock responses are channelled via changes in unemployment, labour market participation, and spatial mobility. Our results provide evidence of asymmetric responses across business cycle phases (1996–2007 and 2008–2012). While changes in participation rates are the main adjustment mechanism in expansion, unemployment and spatial mobility become the central ones in recession. We also provide evidence of real wage rigidities in both periods, due to rigidities in both nominal wages and consumer prices. We conclude with a cluster analysis showing that high and low unemployment regions have similar responses in the short-run while, in the long-run, the former are more reactive in terms of spatial mobility. Overall, we provide evidence that people in a region are more willing to migrate (relative to the national average) when a regional shock occurs in relatively worse economic contexts. Copyright The Author(s) 2014

Suggested Citation

  • Hector Sala & Pedro Trivín, 2014. "Labour market dynamics in Spanish regions: evaluating asymmetries in troublesome times," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 5(2), pages 197-221, August.
  • Handle: RePEc:spr:series:v:5:y:2014:i:2:p:197-221
    DOI: 10.1007/s13209-014-0106-x
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    1. repec:ris:invreg:0375 is not listed on IDEAS
    2. Amparo Nagore García & Arthur van Soest, 2017. "New job matches and their stability before and during the crisis," International Journal of Manpower, Emerald Group Publishing, vol. 38(7), pages 975-995, October.
    3. NAGORE GARCIA Amparo & VAN SOEST Arthur, 2016. "Unemployment Exits Before and During the Crisis," LISER Working Paper Series 2016-14, LISER.
    4. Cuéllar Martín, Jaime & Martín-Román, Ángel L. & Moral, Alfonso, 2017. "A composed error model decomposition and spatial analysis of local unemployment," MPRA Paper 79783, University Library of Munich, Germany.
    5. repec:bla:labour:v:31:y:2017:i:4:p:337-368 is not listed on IDEAS
    6. Cristina Borra & Francisco Gómez-García, 2016. "Wellbeing at Work and the Great Recession: The Effect of Others’ Unemployment," Journal of Happiness Studies, Springer, vol. 17(5), pages 1939-1962, October.
    7. repec:spr:jlabrs:v:53:y:2019:i:1:d:10.1186_s12651-019-0254-3 is not listed on IDEAS
    8. repec:taf:irapec:v:31:y:2017:i:5:p:670-680 is not listed on IDEAS
    9. Smets, Frank & Beyer, Robert C. M., 2015. "Labour market adjustments in Europe and the US: How different?," Working Paper Series 1767, European Central Bank.
    10. repec:bla:presci:v:98:y:2019:i:3:p:1499-1516 is not listed on IDEAS
    11. Juan Jimeno & Tano Santos, 2014. "The crisis of the Spanish economy," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 5(2), pages 125-141, August.
    12. Bande, Roberto & Martín-Román, Ángel, 2018. "Regional differences in the Okun’s Relationship: New Evidence for Spain (1980-2015)," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 41, pages 137-165.

    More about this item

    Keywords

    Employment; Unemployment; Regional labour markets; Spain; J20; E24; J61; R11;

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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