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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

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  • 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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    2. Samuel Bentolila & J. Ignacio García-Pérez & Marcel Jansen, 2017. "Are the Spanish long-term unemployed unemployable?," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 8(1), pages 1-41, March.
    3. Joaquin Garcia-Cabo & Rocio Madera, 2024. "Does Self-Employment Pay? The Role of Unemployment and Earnings Risk," CESifo Working Paper Series 11136, CESifo.
    4. Cervini-Plá, María & Ramos, Xavier & Ignacio Silva, José, 2014. "Wage effects of non-wage labour costs," European Economic Review, Elsevier, vol. 72(C), pages 113-137.
    5. Amparo Nagore García & Arthur van Soest, 2017. "New job matches and their stability before and during the crisis," International Journal of Manpower, Emerald Group Publishing Limited, vol. 38(7), pages 975-995, October.
    6. Adamopoulou, Effrosyni & Villanueva, Ernesto, 2020. "Wage Determination and the Bite of Collective Contracts in Italy and Spain: Evidence from the Metalworking Industry," IZA Discussion Papers 13542, Institute of Labor Economics (IZA).
    7. Pereira, João & Ramos, Raul & Martins, Pedro S., 2024. "Wage cyclicality and labour market institutions," GLO Discussion Paper Series 1469, Global Labor Organization (GLO).
    8. Ana-Isabel Guerra & Laura Varela-Candamio & Jesús López-Rodríguez, 2016. "Evaluating Macroeconomic And Distributional Impacts Of Current And Alternative Tax Reforms In Spain: An Applied General Equilibrium Approach," EcoMod2016 9322, EcoMod.
    9. Paulino Font & Mario Izquierdo & Sergio Puente, 2015. "Real wage responsiveness to unemployment in Spain: asymmetries along the business cycle," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-13, December.
    10. Verdugo, Gregory, 2016. "Real wage cyclicality in the Eurozone before and during the Great Recession: Evidence from micro data," European Economic Review, Elsevier, vol. 82(C), pages 46-69.
    11. Amparo Nagore García, 2017. "Gender Differences in Unemployment Dynamics and Initial Wages over the Business Cycle," Journal of Labor Research, Springer, vol. 38(2), pages 228-260, June.
    12. Cem Özgüzel, 2021. "The Cushioning Effect of Immigrant Mobility," CESifo Working Paper Series 9268, CESifo.
    13. Samuel Bentolila & J. Ignacio García-Pérez & Marcel Jansen, 2017. "Are the Spanish Long-Term Unemployed Unemployable?," Working Papers wp2018_1707, CEMFI.
    14. Jose Garcia‐Louzao, 2021. "Employment and Wages over the Business Cycle in Worker‐Owned Firms: Evidence from Spain," British Journal of Industrial Relations, London School of Economics, vol. 59(2), pages 418-443, June.
    15. Cem Özgüzel, 2020. "The Cushioning Effect of Immigrant Mobility: Evidence from the Great Recession in Spain," PSE Working Papers halshs-03000365, HAL.
    16. De la Roca, Jorge, 2017. "Selection in initial and return migration: Evidence from moves across Spanish cities," Journal of Urban Economics, Elsevier, vol. 100(C), pages 33-53.
    17. Juan Jimeno & Tano Santos, 2014. "The crisis of the Spanish economy," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 5(2), pages 125-141, August.
    18. Juan A. Sanchis-llopis & Antonio Cutanda, 2020. "The Spanish cyclicality of the user cost of labour," Economics Bulletin, AccessEcon, vol. 40(3), pages 1893-1899.
    19. Juan Ignacio Martín-Legendre & José Manuel Sánchez-Santos, 2024. "Household debt and financial vulnerability: empirical evidence for Spain, 2002–2020," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 51(3), pages 703-730, August.
    20. Bjorn Dapi, 2020. "Wage Cyclicality and Composition Bias in the Norwegian Economy," Scandinavian Journal of Economics, Wiley Blackwell, vol. 122(4), pages 1403-1430, October.
    21. Christodoulopoulou, Styliani & Kouvavas, Omiros, 2022. "Wages, compositional effects and the business cycle," Working Paper Series 2653, European Central Bank.
    22. Cem Ozguzel, 2019. "Essays on migration and productivity [Essais sur les migrations et la productivité]," PSE-Ecole d'économie de Paris (Postprint) tel-03381203, HAL.
    23. Golpe, Antonio A. & Sánchez-Fuentes, A. Jesus & Vides, José Carlos, 2023. "Fiscal sustainability, monetary policy and economic growth in the Euro Area: In search of the ultimate causal path," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 1026-1045.
    24. Patricia Peinado & Felipe Serrano, 2017. "Unemployment, wages and pensions," International Review of Applied Economics, Taylor & Francis Journals, vol. 31(5), pages 670-680, September.

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