IDEAS home Printed from https://ideas.repec.org/a/bla/intlab/v159y2020i3p367-396.html
   My bibliography  Save this article

Does deregulation decrease unemployment? An empirical analysis of the Spanish labour market

Author

Listed:
  • Daniel HERRERO
  • Luis CÁRDENAS
  • Julián LÓPEZ GALLEGO

Abstract

Spain underwent two major labour reforms in 2010 and 2012 under the assumption that deregulating the labour market and decentralizing collective bargaining would automatically reduce unemployment (deregulation hypothesis). This article highlights the impact of demand and the sectoral structure of the economy to explain the behaviour of this variable (structural hypothesis). Analysing subnational panel data, the authors assess the capacity of these two hypotheses to explain unemployment trends. Their results cast doubt on the deregulation hypothesis and indicate the importance of cyclical and structural factors.

Suggested Citation

  • Daniel HERRERO & Luis CÁRDENAS & Julián LÓPEZ GALLEGO, 2020. "Does deregulation decrease unemployment? An empirical analysis of the Spanish labour market," International Labour Review, International Labour Organization, vol. 159(3), pages 367-396, September.
    • Handle: RePEc:bla:intlab:v:159:y:2020:i:3:p:367-396
    DOI: 10.1111/ilr.12179
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/ilr.12179
    Download Restriction: no
    File URL: https://libkey.io/10.1111/ilr.12179?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Pasquale TRIDICO, 2013. "The impact of the economic crisis on EU labour markets: A comparative perspective," International Labour Review, International Labour Organization, vol. 152(2), pages 175-190, June.
    2. Samuel Bentolila & Juan Dolado & Juan Jimeno, 2012. "Reforming an insider-outsider labor market: the Spanish experience," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 1(1), pages 1-29, December.
    3. M. Hashem Pesaran, 2006. "Estimation and Inference in Large Heterogeneous Panels with a Multifactor Error Structure," Econometrica, Econometric Society, vol. 74(4), pages 967-1012, July.
    4. Rafael E. De Hoyos & Vasilis Sarafidis, 2006. "Testing for cross-sectional dependence in panel-data models," Stata Journal, StataCorp LP, vol. 6(4), pages 482-496, December.
    5. Engelbert Stockhammer & Erik Klär, 2011. "Capital accumulation, labour market institutions and unemployment in the medium run," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 35(2), pages 437-457.
    6. Heimberger, Philipp & Kapeller, Jakob & Schütz, Bernhard, 2017. "The NAIRU determinants: What’s structural about unemployment in Europe?," Journal of Policy Modeling, Elsevier, vol. 39(5), pages 883-908.
    7. Engelbert Stockhammer, 2004. "The Rise of Unemployment in Europe," Books, Edward Elgar Publishing, number 3111.
    8. repec:ilo:ilowps:483344 is not listed on IDEAS
    9. Samuel Bentolila & Juan Jose Dolado & Juan F. Jimeno, 2008. "Two-tier Employment Protection Reforms: The Spanish Experience," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 6(04), pages 49-56, December.
    10. repec:ces:ifodic:v:6:y:2008:i:4:p:14567215 is not listed on IDEAS
    11. Vasilis Sarafidis & Donald Robertson, 2009. "On the impact of error cross-sectional dependence in short dynamic panel estimation," Econometrics Journal, Royal Economic Society, vol. 12(1), pages 62-81, March.
    12. Samuel Bentolila & Juan Jose Dolado & Juan F. Jimeno, 2008. "Two-tier Employment Protection Reforms: The Spanish Experience," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 6(4), pages 49-56, December.
    13. Sabina Avdagic, 2015. "Does Deregulation Work? Reassessing the Unemployment Effects of Employment Protection," British Journal of Industrial Relations, London School of Economics, vol. 53(1), pages 6-26, March.
    14. Marco Hauptmeier, 2012. "Institutions Are What Actors Make of Them — The Changing Construction of Firm-Level Employment Relations in Spain," British Journal of Industrial Relations, London School of Economics, vol. 50(4), pages 737-759, December.
    15. Baccaro, Lucio & Rei, Diego, 2007. "Institutional Determinants of Unemployment in OECD Countries: Does the Deregulatory View Hold Water?," International Organization, Cambridge University Press, vol. 61(3), pages 527-569, July.
    16. Andrea Bassanini & Romain Duval, 2006. "The Determinants of Unemployment across OECD Countries," Post-Print halshs-00120584, HAL.
    17. Doménech, Rafael & García, Juan Ramón & Ulloa, Camilo, 2018. "The effects of wage flexibility on activity and employment in Spain," Journal of Policy Modeling, Elsevier, vol. 40(6), pages 1200-1220.
    18. Simon STURN, 2013. "Are corporatist labour markets different? Labour market regimes and unemployment in OECD countries," International Labour Review, International Labour Organization, vol. 152(2), pages 237-254, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Johanna Kemper, 2016. "Resolving the Ambiguity: A Meta-Analysis of the Effect of Employment Protection on Employment and Unemployment," KOF Working papers 16-405, KOF Swiss Economic Institute, ETH Zurich.
    2. Franziska Foissner, 2018. "Folgen einer moeglichen Abschaffung der Notstandshilfe in Oberoesterreich," ICAE Working Papers 87, Johannes Kepler University, Institute for Comprehensive Analysis of the Economy.
    3. Sturn, Simon & Epstein, Gerald, 2021. "How much should we trust five-year averaging to purge business cycle effects? A reassessment of the finance-growth and capital accumulation-unemployment nexus," Economic Modelling, Elsevier, vol. 96(C), pages 242-256.
    4. Nina Vishnevskaya, 2019. "State Labour Market Policy: Reforming Institutions in OECD Countries," Public administration issues, Higher School of Economics, issue 1, pages 35-60.
    5. Вишневская Н. Т., 2019. "Государственная Политика На Рынке Труда: Реформирование Институтов В Странах Оэср," Вопросы государственного и муниципального управления // Public administration issues, НИУ ВШЭ, issue 1, pages 35-60.
    6. J. Ignacio Conde-Ruiz & Manu García & Luis A. Puch & Jesús Ruiz, 2019. "Calendar effects in daily aggregate employment creation and destruction in Spain," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 10(1), pages 25-63, March.
    7. Bin Peng & Giovanni Forchini, 2012. "Consistent Estimation of Panel Data Models with a Multi-factor Error Structure," School of Economics Discussion Papers 0112, School of Economics, University of Surrey.
    8. Stefano Visintin & Alessandro Gentile, 2013. "Il mercato del lavoro in spagna: criticit? e riforme strutturali in un contesto di crisi economica," ECONOMIA E SOCIET? REGIONALE, FrancoAngeli Editore, vol. 0(2), pages 65-85.
    9. Deniz, Pinar & Stengos, Thanasis & Yazgan, M. Ege, 2018. "Identification of common factors in panel data growth model," Economics Letters, Elsevier, vol. 168(C), pages 94-97.
    10. Delwar Hossain, 2014. "Differential Impacts of Foreign Capital and Remittance Inflows on Domestic Savings in the Developing Countries: A Dynamic Heterogeneous Panel Analysis," Departmental Working Papers 2014-07, The Australian National University, Arndt-Corden Department of Economics.
    11. Jaromír Baxa & Michal Paulus, 2024. "Exchange rate misalignments, growth, and institutions," Empirical Economics, Springer, vol. 67(4), pages 1705-1799, October.
    12. Rocio Bonet & Marta Elvira & Stefano Visintin, 2024. "Hiring Temps but Losing Perms? Temporary Worker Inflows and Voluntary Turnover of Permanent Employees," Work, Employment & Society, British Sociological Association, vol. 38(1), pages 83-102, February.
    13. Sachs Andreas & Smolny Werner, 2015. "Youth Unemployment in the OECD: The Role of Institutions," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 235(4-5), pages 403-417, August.
    14. Bin Peng & Giovanni Forchini, 2014. "Consistent Estimation of Panel Data Models with a Multifactor Error Structure when the Cross Section Dimension is Large," Working Paper Series 20, Economics Discipline Group, UTS Business School, University of Technology, Sydney.
    15. Emiliano Brancaccio & Fabiana De Cristofaro & Raffaele Giammetti, 2020. "No Consensus In The Imf-Oecd 'Consensus': A Meta-Analysis On The Employment Impact Of Labour Deregulations," Working Papers 445, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    16. Jimeno Juan F. & Martínez-Matute Marta & Mora-Sanguinetti Juan S., 2020. "Employment protection legislation, labor courts, and effective firing costs," IZA Journal of Labor Economics, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 9(1), pages 1-26, January.
    17. Inmaculada Martínez-Zarzoso, 2009. "A General Framework for Estimating CO2 Emissions," Ibero America Institute for Econ. Research (IAI) Discussion Papers 180, Ibero-America Institute for Economic Research.
    18. Daniel Goya, 2014. "The Multiple Impacts of the Exchange Rate on Export Diversification," Cambridge Working Papers in Economics 1436, Faculty of Economics, University of Cambridge.
    19. Zwickl, Klara & Disslbacher, Franziska & Stagl, Sigrid, 2016. "Work-sharing for a sustainable economy," Ecological Economics, Elsevier, vol. 121(C), pages 246-253.
    20. Klara Zwickl & Franziska Disslbacher & Sigrid Stagl, 2016. "Work-sharing for a Sustainable Economy. WWWforEurope Working Paper No. 111," WIFO Studies, WIFO, number 58684.

    More about this item

    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:bla:intlab:v:159:y:2020:i:3:p:367-396. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/ilounch.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.