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The Ins and Outs of Unemployment in a Two-Tier Labor Market

Author

Listed:
  • Silva, José I.

    () (Campus de Montilivi, 17071 Girona, Spain)

  • Vázquez-Grenno, Javier

    () (Av. Diagonal 690, 08034 Barcelona, Spain)

Abstract

This paper aims to shed some light on the dynamics of the Spanish labor market, using data from the Spanish Labor Force Survey for the period 1987 to 2010. We examine transition rates in a three-state model and compare our results with those re- ported for the UK and the US. Explicitly introducing the employment duality present in the Spanish labor market, we study labor market dynamics in a four-state model set-up. We also analyze the behavior of these rates within two sub-periods of recession and a further two sub-periods of boom. We provide evidence of the cyclicality of the transition rates using unconditional and conditional correlations. Finally, we compute the contribution of the di erent transitions to unemployment rate volatility. Our over- all conclusion points out that the employment duality is the key to understand the unemployment volatility and the functioning of the Spanish labor market.

Suggested Citation

  • Silva, José I. & Vázquez-Grenno, Javier, 2012. "The Ins and Outs of Unemployment in a Two-Tier Labor Market," Working Paper Series, Center for Labor Studies 2012:12, Uppsala University, Department of Economics.
  • Handle: RePEc:hhs:uulswp:2012_012
    as

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    References listed on IDEAS

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    Cited by:

    1. Hairault, Jean-Olivier & Le Barbanchon, Thomas & Sopraseuth, Thepthida, 2015. "The cyclicality of the separation and job finding rates in France," European Economic Review, Elsevier, vol. 76(C), pages 60-84.
    2. Sara Rica & Yolanda F. Rebollo-Sanz, 2017. "Gender Differentials in Unemployment Ins and Outs during the Great Recession in Spain," De Economist, Springer, vol. 165(1), pages 67-99, March.
    3. Ronald Bachmann & Peggy Bechara & Anica Kramer & Sylvi Rzepka, 2015. "Labour market dynamics and worker heterogeneity during the Great Recession – Evidence from Europe," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-29, December.
    4. Elisabet Motellón & Enrique López-Bazo, 2015. "Job Loss Among Immigrant and Native Workers: Evidence from Spain’s Economic Downturn," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 120(2), pages 345-371, January.
    5. Javier Vázquez-Grenno & Jordi Jofre-Monseny & José I. Silva, 2016. "Local labor market effects of public employment," Working Papers 2016/11, Institut d'Economia de Barcelona (IEB).
    6. Rothe, Thomas & Wälde, Klaus, 2017. "Where did all the unemployed go? : Non-standard work in Germany after the Hartz reforms," IAB Discussion Paper 201718, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    7. Yolanda Rebollo-Sanz & J. García-Pérez, 2015. "Are unemployment benefits harmful to the stability of working careers? The case of Spain," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 6(1), pages 1-41, March.
    8. repec:bla:labour:v:31:y:2017:i:4:p:337-368 is not listed on IDEAS
    9. Maurizio Baussola & Jamie Jenkins & Chiara Mussida & Matthew Penfold, 2015. "The Unemployment Gender Gap in a Comparative Perspective," Discussion Papers 5_2015, CRISEI, University of Naples "Parthenope", Italy.
    10. Pedro Gomes, 2015. "The importance of frequency in estimating labour market transition rates," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-10, December.
    11. Cristina Lafuente, 2018. "The best of the two worlds: assessing the use of administrative data for the study of employment," ESE Discussion Papers 286, Edinburgh School of Economics, University of Edinburgh.
    12. NAGORE GARCIA Amparo & VAN SOEST Arthur, 2016. "Unemployment Exits Before and During the Crisis," LISER Working Paper Series 2016-14, LISER.
    13. Cristina Lafuente, 2017. "Search capital and Unemployment Duration (Preliminary)," ESE Discussion Papers 283, Edinburgh School of Economics, University of Edinburgh.

    More about this item

    Keywords

    job finding rate; job separation rate; unemployment;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

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