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Regional Disparities in the Unemployment Rate: The Role of the Wage-setting Mechanism in Spain, 1987-92

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  • Roberto Bande
  • Melchor Fernandez
  • Victor Montuenga

Abstract

Bande R., Fernandez M. and Montuenga V. M. (2007) Regional disparities in the unemployment rate: the role of the wage-setting mechanism in Spain, 1987-92, Regional Studies 41, -. The aim of this paper is to show how regional unemployment disparities in Spain widen during economic upturns and to provide an explanation of this behaviour. The analysis is based on the study of the wage-setting mechanism that allows an estimation of the responses of wages to both labour productivity and the general situation of the labour market, and an assessment of their impact on the evolution of regional unemployment. The results of this estimation at the regional level with manufacturing data confirm the existence of marked differences between industries and between regions these responses. These differences can be interpreted as a distinctive wage-setting mechanism across industries and regions, which may explain the evolution of unemployment rates within the regional labour markets. Bande R., Fernandez M. et Montuenga V. M. (2007) Les ecarts regionaux du taux de chomage: le role du reajustement des salaires en Espagne de 1987 a 1992, Regional Studies 41, -. Cet article cherche a demontrer comment les ecarts regionaux du taux de chomage en Espagne se creusent au moment d'une reprise economique et a en fournir une explication. L'analyse est fondee sur une etude du reajustement des salaires, ce qui permet une estimation de la reponse des salaires a la productivite du travail et a la situation generale sur le marche du travail, et l'evaluation de leur impact sur l'evolution du chomage sur le plan regional. Les resultats de cette estimation faite au niveau regional a partir des donnees l'industrielles confirment la presence des differences interindustrielles et interregionales sensibles. On pourrait interpreter ces differences comme un reajustement des salaires caracteristique a travers les industries et les regions, ce qui expliquerait l'evolution des taux de chomage au sein des marches du travail regionaux. Ecarts des salaires Chomage Donnees par enquete permanente Espagne Bande R., Fernandez M. und Montuenga V. M. (2007) Regionale Ungleichgewichte bei den Arbeitslosenzahlen: die Rolle der Mechanismen zur Lohnfestsetzung in Spanien, 1987-92, Regional Studies 41, -. In diesem Beitrag wird verdeutlicht, wie sich in Spanien regionale Ungleichgewichte im Beschaftigungsniveau wahrend eines Wirtschaftsaufschwungs verstarken, und es wird eine Erklarung fur dieses Phanomen geliefert. Die Analyse grundet auf einer Untersuchung des Mechanismus zur Lohnfestsetzung, die es ermoglicht, die Reaktion der Lohne auf die Arbeitsproduktivitat und die allgemeine Situation auf dem Arbeitsmarkt abzuschatzen und deren Auswirkung auf die Entwicklung der regionalen Arbeitslosigkeit zu bewerten. Die Ergebnisse dieser Schatzung auf regionaler Ebene mit Produktionsdaten bestatigen die Existenz ausgepragter Unterschiede hinsichtlich dieser Reaktionen zwischen den verschiedenen Branchen und Regionen. Diese Unterschiede lassen sich als charakteristischer Mechanismus zur Lohnfestsetzung fur verschiedene Branchen und Regionen interpretieren, was die Entwicklung der Arbeitslosenzahlen innerhalb der regionalen Arbeitsmarkte erklaren konnte. Lohnunterschiede Arbeitslosigkeit Paneldaten Spanien Bande R., Fernandez M. y Montuenga V. M. (2007) Desigualdades regionales en la tasa de desempleo: la importancia del mecanismo para determinar salarios en Espana, 1987-92, Regional Studies 41, -. El objetivo de este articulo es demostrar en que medida aumentan en Espana las desigualdades regionales de desempleo cuando ocurre un repunte en la economia y explicar el motivo de este comportamiento. Este analisis se basa en el estudio del mecanismo de la determinacion de salarios que permite calcular como responden los salarios a la productividad laboral y la situacion general del mercado de trabajo, y evaluar el impacto en la evolucion del desempleo regional. Los resultados de esta estimacion a nivel regional con datos industriales confirman la existencia de marcadas diferencias entre las industrias y las regiones con estas respuestas. Estas diferencias pueden ser interpretadas como un mecanismo distintivo de la determinacion de salarios en las industrias y regiones lo que explicaria la evolucion de las tasas de desempleo en los mercados laborales a nivel regional. Diferencias de salarios Desempleo Datos del panel Espana

Suggested Citation

  • Roberto Bande & Melchor Fernandez & Victor Montuenga, 2007. "Regional Disparities in the Unemployment Rate: The Role of the Wage-setting Mechanism in Spain, 1987-92," Regional Studies, Taylor & Francis Journals, vol. 41(2), pages 235-251.
    • Handle: RePEc:taf:regstd:v:41:y:2007:i:2:p:235-251
    DOI: 10.1080/00343400601099680
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    References listed on IDEAS

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    2. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173.
    3. Lucio R. Pench & Paolo Sestito & Elisabetta Frontini, 1999. "Some unpleasant arithmetics of regional unemployment in the EU. Are there any lessons for EMU?," European Economy - Economic Papers 2008 - 2015 134, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
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    1. Roberto Bande Ramudo & Melchor Fernández Fernández & Víctor Montuenga Gómez, 2011. "Wage flexibility and local labour markets: homogeneity of the wage curve in Spain," Documentos de trabajo - Analise Economica 0044, IDEGA - Instituto Universitario de Estudios e Desenvolvemento de Galicia.
    2. Roberto Bande & Marika Karanassou, 2009. "Labour market flexibility and regional unemployment rate dynamics: Spain 1980–1995," Papers in Regional Science, Wiley Blackwell, vol. 88(1), pages 181-207, March.
    3. Bande, Roberto & Fernández, Melchor & Montuenga, Víctor, 2008. "Regional unemployment in Spain: Disparities, business cycle and wage setting," Labour Economics, Elsevier, vol. 15(5), pages 885-914, October.
    4. Roberto Bande & Marika Karanassou, 2011. "The NRU and the Evolution of Regional Disparities in Spanish Unemployment," Documentos de trabajo - Analise Economica 0043, IDEGA - Instituto Universitario de Estudios e Desenvolvemento de Galicia.
    5. Binet Marie-estelle & Francois Facchini, 2013. "Okun's law in the french regions: a cross-regional comparison," Economics Bulletin, AccessEcon, vol. 33(1), pages 420-433.
    6. Roberto Bande & Marika Karanassou, 2014. "Spanish Regional Unemployment Revisited: The Role of Capital Accumulation," Regional Studies, Taylor & Francis Journals, vol. 48(11), pages 1863-1883, November.
    7. Ángel L. Martín‐Román & Jaime Cuéllar‐Martín & Alfonso Moral, 2023. "Natural and cyclical unemployment: A stochastic frontier decomposition and economic policy implications," Bulletin of Economic Research, Wiley Blackwell, vol. 75(1), pages 5-39, January.
    8. Tindara Addabbo & Rosa García-Fernández & Carmen Llorca-Rodríguez & Anna Maccagnan, 2013. "The effect of the crisis on material deprivation in Italy and Spain," Department of Economics (DEMB) 0019, University of Modena and Reggio Emilia, Department of Economics "Marco Biagi".
    9. Roberto Bande & Marika Karanassou, 2014. "Spanish Regional Unemployment Revisited: The Role of Capital Accumulation," Regional Studies, Taylor & Francis Journals, vol. 48(11), pages 1863-1883, November.
    10. Steve Bradley & Giuseppe Migali & Maria Navarro Paniagua, 2019. "Spatial variations and clustering in the rates of youth unemployment and NEET," Working Papers 262342718, Lancaster University Management School, Economics Department.
    11. Marukawa, Tomoo, 2017. "Regional unemployment disparities in China," Economic Systems, Elsevier, vol. 41(2), pages 203-214.
    12. Roberto Bande & Marika Karanassou, 2009. "Labour market flexibility and regional unemployment rate dynamics: Spain 1980–1995," Papers in Regional Science, Wiley Blackwell, vol. 88(1), pages 181-207, March.

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