Omitted variables in the measure of a labour quality index: the case of Spain
Traditional measures of labour quality might have the shortcoming of missing some features of the very important increase in labour utilization within European countries. In particular, we explore the case of Spain. Despite showing one of the most important increases in labour quality in the EU according to standard methods, it also offers a negative increase in TFP growth. This paper computes an index of labour quality in Spain between 1988 and 2006 using microdata from the Labour Force Survey and the Structural Earnings Survey-2002 that allows the introduction of all possible interactions in a semi-parametric fashion between gender, age, education, experience in the current job and nationality. Considering those observable characteristics, the index still shows a notable growth at an average annual rate of 0.42 pp. After a period of slight decline (between 1988 and 1992) the index grows continuously until 2006 when it fell again. This is the case because education is, even by considering all possible interactions with other demographic variables, the highest contributor to the quality index’s growth. However, the paper shows the importance of considering changes in average productivities of different socio-demographic groups over time. We include in the analysis two usually omitted variables that help explaining the recent productivity slowdown in Spain: type of occupation held by the individual and unobserved heterogeneity of workers. Both the inclusion of occupation and especially the entry of individuals with below-average productivity levels compared to precedent periods decrease the labour quality growth to an average annual rate of 0.20 pp. Indeed with the addition of these two factors labour quality slightly decreases from 1997 onwards.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hanushek, Eric A. & Wößmann, Ludger, 2008.
"The role of cognitive skills in economic development,"
Munich Reprints in Economics
20454, University of Munich, Department of Economics.
- Eric A. Hanushek & Ludger Woessmann, 2008. "The Role of Cognitive Skills in Economic Development," Journal of Economic Literature, American Economic Association, vol. 46(3), pages 607-68, September.
- Eric Hanushek & Ludger Woessmann, 2008. "The Role of Cognitive Skills in Economic Development," Discussion Papers 07-034, Stanford Institute for Economic Policy Research.
- Sattinger, Michael, 1993. "Assignment Models of the Distribution of Earnings," Journal of Economic Literature, American Economic Association, vol. 31(2), pages 831-80, June.
- Juan Mora & Antonia Febrer, 2005. "Wage Distribution In Spain, 1994-1999: An Application Of A Flexible Estimator Of Conditional Distributions," Working Papers. Serie EC 2005-04, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- Mulligan, Casey B & Sala-i-Martin, Xavier, 2000.
" Measuring Aggregate Human Capital,"
Journal of Economic Growth,
Springer, vol. 5(3), pages 215-52, September.
- Sala-i-Martin, X. & Mulligan, C.B., 1995. "Measuring Aggregate Human Capital," Papers 723, Yale - Economic Growth Center.
- Mulligan, Casey B & Sala-i-Martin, Xavier, 1995. "Measuring Aggregate Human Capital," CEPR Discussion Papers 1149, C.E.P.R. Discussion Papers.
- Casey B. Mulligan & Xavier Sala-i-Martin, 1995. "Measuring Aggregate Human Capital," NBER Working Papers 5016, National Bureau of Economic Research, Inc.
- Casey B. Mulligan & Xavier Sala-i-Martin, 1994. "Measuring aggregate human capital," Economics Working Papers 112, Department of Economics and Business, Universitat Pompeu Fabra, revised Jan 1995.
- Barro, Robert J & Lee, Jong Wha, 1996. "International Measures of Schooling Years and Schooling Quality," American Economic Review, American Economic Association, vol. 86(2), pages 218-23, May.
- Schwerdt, Guido & Turunen, Jarkko, 2006.
"Growth in Euro Area Labour Quality,"
CEPR Discussion Papers
5509, C.E.P.R. Discussion Papers.
- Catalina Amuedo-Dorantes & Sara de la Rica, 2007.
"Labour Market Assimilation of Recent Immigrants in Spain,"
British Journal of Industrial Relations,
London School of Economics, vol. 45(2), pages 257-284, 06.
- Amuedo Dorantes, Catalina & De la Rica Goiricelaya, Sara, 2006. "Labor Market Assimilation of Recent Immigrants in Spain," DFAEII Working Papers 2006-01, University of the Basque Country - Department of Foundations of Economic Analysis II.
- Amuedo-Dorantes, Catalina & de la Rica, Sara, 2006. "Labor Market Assimilation of Recent Immigrants in Spain," IZA Discussion Papers 2104, Institute for the Study of Labor (IZA).
- Olympia Bover & Samuel Bentolila & Manuel Arellano, 2000.
"The Distribution of Earnings in Spain During the 1980s: the Effects of Skill, Unemployment, and Union Power,"
Banco de Espa�a Working Papers
0015, Banco de Espa�a.
- Arellano, Manuel & Bentolila, Samuel & Bover, Olympia, 2001. "The Distribution of Earnings in Spain During the 1980s: The Effects of Skill, Unemployment and Union Power," CEPR Discussion Papers 2770, C.E.P.R. Discussion Papers.
- Daniel Aaronson & Daniel Sullivan, 2001.
"Growth in worker quality,"
Federal Reserve Bank of Chicago, issue Q IV, pages 53-74.
- Izquierdo, Mario & Lacuesta, Aitor, 2007.
"Wage inequality in Spain: recent developments,"
Working Paper Series
0781, European Central Bank.
- Amparo Castello & Rafael Domenech, 2002. "Human Capital Inequality and Economic Growth: Some New Evidence," Economic Journal, Royal Economic Society, vol. 112(478), pages C187-C200, March.
- Cristina Fernández & Carolina Ortega, 2008.
"Labor market assimilation of immigrants in Spain: employment at the expense of bad job-matches?,"
Spanish Economic Review,
Springer, vol. 10(2), pages 83-107, June.
- Fernandez, Cristina & Ortega, Carolina, 2006. "Labour market assimilation of immigrants in Spain: employment at the expense of bad job-matches?," IESE Research Papers D/644, IESE Business School.
- Cristina Fernández & Ana Carolina Ortega Masagué, 2006. "Labor Market Assimilation of Immigrants in Spain: Employment at the Expense of Bad Job-Matches?," Working Papers 2006-21, FEDEA.
- Casey B. Mulligan & Xavier Sala-i-Martin, 1994.
"A labor-income-based measure of the value of human capital: An application to the States of the United States,"
Economics Working Papers
106, Department of Economics and Business, Universitat Pompeu Fabra, revised Dec 1994.
- Mulligan, C. B. & Sala-i-Martin, X., 1997. "A labor income-based measure of the value of human capital: An application to the states of the United States," Japan and the World Economy, Elsevier, vol. 9(2), pages 159-191, May.
- Casey B. Mulligan & Xavier Sala-i-Martin, 1995. "A Labor-Income-Based Measure of the Value of Human Capital: An Application to the States of the United States," NBER Working Papers 5018, National Bureau of Economic Research, Inc.
- Mulligan, Casey B & Sala-i-Martin, Xavier, 1995. "A Labour-Income-Based Measure of the Value of Human Capital: An Application to the States of the United States," CEPR Discussion Papers 1146, C.E.P.R. Discussion Papers.
- Heckman, James, 2013.
"Sample selection bias as a specification error,"
Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
- Josep Pijoan-Mas & Virginia Sanchez-Marcos, 2010.
"Spain is Different: Falling Trends of Inequality,"
Review of Economic Dynamics,
Elsevier for the Society for Economic Dynamics, vol. 13(1), pages 154-178, January.
- Josep Pijoan-Mas & Virginia Sanchez-Marcos, 2009. "Code and data files for "Spain is Different: Falling Trends of Inequality"," Computer Codes 09-199, Review of Economic Dynamics.
- Pijoan-Mas, Josep & Sánchez-Marcos, Virginia, 2009. "Spain is Different: Falling Trends of Inequality," CEPR Discussion Papers 7489, C.E.P.R. Discussion Papers.
- Josep Pijoan-Mas & Virginia Sánchez-Marcos, 2009. "Spain Is Different: Falling Trends Of Inequeality," Working Papers wp2009_0910, CEMFI.
- Abadie,A., 1995.
"Changes in Spanish Labor Income Structure During the 1980's:a Quantile Regression Approach,"
9521, Centro de Estudios Monetarios Y Financieros-.
- Alberto Abadie, 1997. "Changes in Spanish labor income structure during the 1980's: a quantile regression aproach," Investigaciones Economicas, Fundación SEPI, vol. 21(2), pages 253-272, May.
- Susanto Basu & John G. Fernald, 1997.
"Aggregate productivity and aggregate technology,"
International Finance Discussion Papers
593, Board of Governors of the Federal Reserve System (U.S.).
- Angel Estrada & J. David López-Salido, 2001.
"Sectoral and Aggregate Technology Growth in Spain,"
Banco de Espa�a Working Papers
0116, Banco de Espa�a.
- del Rio, Coral & Ruiz-Castillo, Javier, 2001. "Intermediate Inequality and Welfare: The Case of Spain, 1980-81 to 1990-91," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 47(2), pages 221-37, June.
When requesting a correction, please mention this item's handle: RePEc:bde:wpaper:0835. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mar�a Beiro. Electronic Dissemination of Information Unit. Research Department. Banco de Espa�a)
If references are entirely missing, you can add them using this form.