IDEAS home Printed from https://ideas.repec.org/p/iei/wpaper/0903.html
   My bibliography  Save this paper

Job Creation in Spain: Productivity Growth, Labour Market Reforms or both?

Author

Listed:
  • Javier Andrés Domingo

    () (University of Valencia, Spain)

  • José Emilio Boscá

    () (University of Valencia, Spain)

  • Rafael Domenech Vilariño

    () (University of Valencia, Spain)

  • Javier Ferri

    () (University of Valencia, Spain)

Abstract

The benefits implied by changing the growth model are at the heart of the heated political and economic debate in Spain. Increases in productivity and the reallocation of employment towards more innovative sectors are defended as the panacea for most of the ills afflicting the Spanish economy. In this paper we use a DSGE model with price rigidities, and labour market search frictions a la Mortensen-Pissarides, to assess the effects of the change in the growth model on unemployment. In so doing, we assume that the vigorous demand shock which has been mostly responsible for recent economic growth in Spain will be successfully substituted by a productivity shock as the main driver of Spain‘s economic growth in the future. So we assume that we actually succeed in the so called "change in the growth model". We show that whatever the benefits that this change might bring to the Spanish economy, the time span needed to bring the unemployment rate down to the European average actually increases. We then analyze the impact of several reforms in the labour market and evaluate their interaction with the new growth model. We conclude that changes in the economic structure do not make labour reforms any less necessary, but rather the opposite if we want to shorten employment recovery significantly.

Suggested Citation

  • Javier Andrés Domingo & José Emilio Boscá & Rafael Domenech Vilariño & Javier Ferri, 2009. "Job Creation in Spain: Productivity Growth, Labour Market Reforms or both?," Working Papers 0903, International Economics Institute, University of Valencia.
  • Handle: RePEc:iei:wpaper:0903
    as

    Download full text from publisher

    File URL: http://iei.uv.es/docs/wp_internos/RePEc/pdf/iei_0903.pdf
    File Function: First version, 2009
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Huang, Ho-Chuan (River) & Lin, Shu-Chin, 2008. "Smooth-time-varying Okun's coefficients," Economic Modelling, Elsevier, vol. 25(2), pages 363-375, March.
    2. Jose Emilio Boscá & Rafael Domenech & Javier Ferri, 2008. "Tax Reforms and Labour-market Performance: An Evaluation for Spain using REMS," Working Papers 0804, International Economics Institute, University of Valencia.
    3. J. Boscá & A. Díaz & R. Doménech & J. Ferri & E. Pérez & L. Puch, 2010. "A rational expectations model for simulation and policy evaluation of the Spanish economy," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 1(1), pages 135-169, March.
    4. Ian Dew-Becker & Robert J. Gordon, 2008. "The Role of Labor Market Changes in the Slowdown of European Productivity Growth," NBER Working Papers 13840, National Bureau of Economic Research, Inc.
    5. Pietro Garibaldi & Paolo Mauro, 2002. "Anatomy of employment growth," Economic Policy, CEPR;CES;MSH, vol. 17(34), pages 67-114, April.
    6. Diego Romero-Avila & Carlos Usabiaga, 2007. "Unit root tests and persistence of unemployment: Spain vs. the United States," Applied Economics Letters, Taylor & Francis Journals, vol. 14(6), pages 457-461.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Escudero, Verónica & López Mourelo, Elva, 2012. "Improving Competitiveness and Fostering Productivity in Spain/Mejorar la competitividad y fomentar la productividad en España," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 30, pages 105-136, Abril.
    2. García Serrano, Carlos & Malo, Miguel A., 2013. "Beyond the contract type segmentation in Spain : country case studies on labour market segmentation," ILO Working Papers 994814983402676, International Labour Organization.
    3. Roxana Gutiérrez-Romero, 2012. "Determinants of Spanish Firms' Life Cycle and Job Creation: A Pseudo-Panel Approach," Working Papers wpdea1209, Department of Applied Economics at Universitat Autonoma of Barcelona.
    4. repec:ilo:ilowps:481498 is not listed on IDEAS
    5. Etienne Wasmer & Nicolas Lepage-Saucier & Juliette Schleich, 2013. "Moving towards a single labour contract: pros, cons and mixed feelings," Sciences Po publications info:hdl:2441/772g8m5php8, Sciences Po.
    6. J. Ignacio Conde-Ruiz & Florentino Felgueroso & J. Ignacio García-Pérez, 2011. "Reforma Laboral 2010: Una Primera Evaluación Y Propuestas De Mejora," Revista de Economia Aplicada, Universidad de Zaragoza, Departamento de Estructura Economica y Economia Publica, vol. 19(3), pages 147-180, Winter.

    More about this item

    Keywords

    artistic creation; superstars; private copy; piracy; levies;

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iei:wpaper:0903. 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: (Investigación IEI). General contact details of provider: http://edirc.repec.org/data/ievales.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.