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Wage cyclicality: Evidence from Spain using social security data

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  • Jorge Roca

Abstract

Using longitudinal social security data, this study finds evidence of weak real wage cyclicality in Spain throughout 1988–2011. The baseline estimate of a 0.4 % increase in wages in response to a one percentage point decline in the unemployment rate lies in the lower bound of available estimates for developed countries. Wage cyclicality in a rigid labour market like Spain is mainly driven by workers under temporary contracts and newly-hired workers. I calculate the cyclicality of the net present value of wages in new matches—the relevant piece of information for firms posting vacancies, but a rarely available measure—and find that it is well approximated by the cyclicality of wages for newly-hired workers. Copyright The Author(s) 2014

Suggested Citation

  • Jorge Roca, 2014. "Wage cyclicality: Evidence from Spain using social security data," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 5(2), pages 173-195, August.
    • Handle: RePEc:spr:series:v:5:y:2014:i:2:p:173-195
    DOI: 10.1007/s13209-014-0111-0
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