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The fall in consumption from being unemployed in Portugal and Spain

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  • Castillo, Sonsoles
  • Jimeno, Juan F.

Abstract

In Portugal real wage flexibility, at the macroeconomic level, is noticeably higher while unemploymem duration is lower when compared to Spain. This suggests that the hardship of being unemployed is higher in Portugal. Unemployment benefits and family insurance, which are the main buffer against unemployment and have played difterent role in both countries, can explain this disparity. In this chapter we present some estimates of the loss of consumption suffered by unemployed workers relative to employed workers in Portugal and Spain. The estimates come form comparable data sets (cross-sections of the Household Budget Surveys). Our resuits confirm our prior: this loss is much more sizeable in Portugal.

Suggested Citation

  • Castillo, Sonsoles & Jimeno, Juan F., 1998. "The fall in consumption from being unemployed in Portugal and Spain," UC3M Working papers. Economics 4156, Universidad Carlos III de Madrid. Departamento de Economía.
    • Handle: RePEc:cte:werepe:4156
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    References listed on IDEAS

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    1. Poterba, James M, 1989. "Lifetime Incidence and the Distributional Burden of Excise Taxes," American Economic Review, American Economic Association, vol. 79(2), pages 325-330, May.
    2. Blanchard, Olivier & Jimeno, Juan F, 1995. "Structural Unemployment: Spain versus Portugal," American Economic Review, American Economic Association, vol. 85(2), pages 212-218, May.
    3. Martin Browning & Thomas Crossley, "undated". "Shocks, stocks and socks: consumption smoothing and the replacement of durables during an unemployment spell," Canadian International Labour Network Working Papers 27, McMaster University.
    4. Olympia Bover & Pilar García-Perea & Pedro Portugal, 1998. "A Comparative Study of the Portuguese and Spanish Labour Markets," Working Papers 9807, Banco de España.
    5. Gruber, Jonathan, 1997. "The Consumption Smoothing Benefits of Unemployment Insurance," American Economic Review, American Economic Association, vol. 87(1), pages 192-205, March.
    6. Olympia Bover & Manuel Arellano & Samuel Bentolila, 2002. "Unemployment Duration, Benefit Duration and the Business Cycle," Economic Journal, Royal Economic Society, vol. 112(479), pages 223-265, April.
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    Cited by:

    1. Ramon Ballester & Jackeline Velazco & Ricard Rigall-I-Torrent, 2015. "Effects of the Great Recession on Immigrants’ Household Consumption in Spain," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 123(3), pages 771-797, September.
    2. Cristina Bernini & Silvia Emili & Federica Galli, 2021. "Does urbanization matter in the expenditure‐happiness nexus?," Papers in Regional Science, Wiley Blackwell, vol. 100(6), pages 1403-1428, December.
    3. Namkee Ahn, & Juan F. Jimeno & Arantza Ugidos, "undated". "“Mondays at the sun”: Unemployment, Time Use, and Consumption Patterns in Spain," Working Papers 2003-18, FEDEA.

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    Keywords

    Unemployment;

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