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The goal of this paper is to explain the strikingly different response of Spanish unemployment relative to other European economies, in particular France, during the ongoing recession. The Spanish unemployment rate, which fell from 22% in 1994 to 8% in 2007, when Spain was creating a large share of jobs in the EU, is expected to reach 20% by the en...
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... replacing ε by ε in equation JC, using equation (18), it is easy to show that, along the JC locus, labour tightness θ is a decreasing function of the reservation productivity ε d . In other words, the lower the destruction threshold ε d , the longer jobs last on average, which leads to a higher creation of vacancies. Conversely, for a given value of ε d , a higher fi ring cost f reduces the expected present value of jobs and therefore hinders job creation. In sum, the three unknowns θ , ε c , and ε d are de fi ned by JC and by equations (18) and (21). A graphical representation of the equilibrium values is o ff ered in Figure 2, where the crossing of the JC (having replaced ε c by ε d ) and LTJD loci in the ( θ , ε d ) space determines the equilibrium values of these two variables, whereas (18) determines the equilibrium value of ε c . In Figure 3 we consider the e ff ect of a larger di ff erence in fi ring costs between permanent and temporary workers, relative to a situation where this gap is smaller. This is captured by a rise in f , which shifts upwards the LTJC locus and downwards the LTJD and JC schedules. Firms unambiguously become less exacting in fi ring permanent workers (lower ε d ) and more exacting in transforming temporary contracts into permanent ones (higher ε c ). In principle, although the e ff ect on θ , and thus on unemployment, is ambiguous, the lower the conversion rate is (induced by higher f ) the more likely it is ...
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School transport in Spain is conceived administratively as a regular, but special, public transport service financed by the Spanish regional governments through private sector contracts adjudicated by public tendering. As such it has two special features in comparison to systems elsewhere. First, larger operators use conventional buses (rather than...
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... Finally, the main feature of the reform in December 2002 (Law 45/02) was the abolition of the firm's obligation to pay interim wages when dismissed workers appealed to labour courts, as long as the firm acknowledged the dismissal to be unfair and deposited the highest severance pay (45 days) in court two days before the dismissal. Although, in principle, is arguable whether this reform meant a reduction in F, there is evidence that, in order to avoid lengthy court procedures, most employers ended up paying much higher firing costs than the statutory ones under "fair" dismissals (Bentolila et al. 2012). Thus, in contrast to the two previous reforms, we interpret this reform as one where F increased. ...
... Interestingly, most of these industries-e.g., Basic Metals and Fabricated Products, Plastic and Rubber Products, Textiles and Apparel, etc.-are ancillary to the construction sector. This sector experienced a boom since the early 2000s as a result of the large reduction in real interest rates which Spain enjoyed after joining the euro SERIEs Bentolila et al. (2012), investors in Spain partly bet rationally for low-value added industries rather than high value-added ones (like ITs) because the rigid PC would have been inadequate to specialize in more innovative industries which require higher labor flexibility to accommodate the higher degree of uncertainty typically associated with producing high value-added goods (Saint-Paul 1997). 22 Thus, they specialized in sectors where flexible TCs could be amply used. ...
... See, inter alia,Blanchard and Landier (2002),Dolado et al. (2002),Cahuc and Postel-Vinay (2002) andBentolila et al. (2012). ...
This paper analyzes the effect of having a large gap in firing costs between permanent and temporary workers in a dual labour market on TFP development at the firm level. We propose a simple model showing that, under plausible conditions, both temporary workers' effort and firms' temp-to-perm conversion rates decrease when that gap increases. We test this implication by means of a panel of Spanish manufacturing firms from 1991 to 2005, using as natural experiments some labour market reforms entailing substantial changes in this gap. Our main empirical finding is that reforms leading to a lower gap enhanced conversion rates, which in turn increased firms' TFP, and conversely for reforms that increased the gap.
... Finally, the main feature of the reform in December 2002 (Law 45/02) was the abolition of the firm's obligation to pay interim wages when dismissed workers appealed to labour courts, as long as the firm acknowledged the dismissal to be unfair and deposited the highest severance pay (45 days) in court two days before the dismissal. Although, in principle, is arguable whether this reform meant a reduction in F, there is evidence that, in order to avoid lengthy court procedures, most employers ended up paying much higher firing costs than the statutory ones under "fair" dismissals (Bentolila et al. 2012). Thus, in contrast to the two previous reforms, we interpret this reform as one where F increased. ...
... Interestingly, most of these industries-e.g., Basic Metals and Fabricated Products, Plastic and Rubber Products, Textiles and Apparel, etc.-are ancillary to the construction sector. This sector experienced a boom since the early 2000s as a result of the large reduction in real interest rates which Spain enjoyed after joining the euro SERIEs Bentolila et al. (2012), investors in Spain partly bet rationally for low-value added industries rather than high value-added ones (like ITs) because the rigid PC would have been inadequate to specialize in more innovative industries which require higher labor flexibility to accommodate the higher degree of uncertainty typically associated with producing high value-added goods (Saint-Paul 1997). 22 Thus, they specialized in sectors where flexible TCs could be amply used. ...
... See, inter alia,Blanchard and Landier (2002),Dolado et al. (2002),Cahuc and Postel-Vinay (2002) andBentolila et al. (2012). ...
... where p = f jJ p ( ) = 0g (6) denotes the threshold value above which permanent jobs are no longer pro…table. Equation (5) shows that function decreases with ; 15 with a kink at p as shown on …gure 2. When the shock arrival rate is smaller than p ; temporary jobs that have not been hit by a shock at duration ( p ) are transformed into permanent jobs. When the shock arrival rate is larger than p ; temporary jobs are destroyed when they reach their termination date. ...
This paper analyzes the consequences of the taxation of temporary jobs
recently introduced in several European countries to induce firms to create
more open-ended contracts and to increase the duration of jobs. The
estimation of a job search and matching model on French data shows that the
taxation of temporary jobs does not reach its objectives: it reduces the
mean duration of jobs and decreases job creation, employment and welfare of
unemployed workers. We find that a reform introducing an open-ended contract
without layoff costs for separations occurring at short tenure would have
opposite effects.
... As for dual labor markets, the literature has identifies many effects on employment, wages, worker turnover, and productivity. 12 An interesting quantitative study comparing employment adjustment in France and Spain during the Great Recession (Bentolila, Cahuc, Dolado, and Le Barbanchon, 2012) finds that part of the differential in the increase of unemployment between the two countries was due to the larger gap between the dismissal costs of permanent and temporary contracts and the less restrictive rules regarding the use of the latter contracts in Spain, and that about 45% of the surge in Spanish unemployment could have been avoided had Spain adopted French employment protection legislation before the crisis started. ...
Since the mid-2000s there has been an increasing divergence in unemployment rates across EU countries and age groups. We argue that this divergence has to do with labor market institutions when account is made of their interactions with the magnitude and nature of the shocks from the Great Recession and the Eurozone debt crisis. New macro and micro evidence is provided highlighting the importance of these interactions in explaining cross-country differences in labor market adjustment to shocks. Having identified the labor market institutions responsible for this increasing unemployment divergence, we consider what can be done at the EU level to promote institutional convergence. In particular, we discuss a “positive conditionality” approach that could operate also in good times, and not only under recessions, when conditionality is strong, but some reforms may backfire.
... Third, some papers explain why short-term contracts and long-term contracts may coexist in the absence of employment protection legislation. This issue is particularily relevant to understanding the emergence of temporary contracts in labor markets where there is little di¤erence between the termination costs of temporary and permanent contracts, as in some 11 See among others, Lazear (1990), Bentolila and Saint-Paul (1992), Saint-Paul (1996), Ljungqvist (2002 (2007), Sala et al. (2011), Costain et al. (2010), Bentolila et al. (2010), Saint-Paul (1996 pro…table workers when the stock of job seekers has been su¢ ciently renewed. This model o¤ers an underlying rationale for why some employment is limited in duration. ...
This paper provides a simple model which explains the choice between permanent and temporary jobs. This model, which incorporates important features of actual employment protection legislations neglected by the economic literature so far, reproduces the main stylized facts about entries into permanent and temporary jobs observed in Continental European countries. We show that the stringency of legal constraints on the termination of permanent jobs has a strong positive impact on the turnover of temporary jobs. We also find that job protection has very small effects on total employment but induces large substitution of temporary jobs for permanent jobs which significantly reduces aggregate production.
... The shock arrives according to a Poisson process with parameter μ. To simplify our analysis, and following Bentolila et al. (2009), we assume that all new jobs are created with the maximum productivity level, ε. ...
In a general equilibrium context, we analyze the impact of changes in institutional labor market conditions, such as access to financing and efficiency, on the composition of employment and unemployment, considering the nature of formal labor contracts and the entrepreneurial capacity of the labor force. We extend the Mortensen - Pissarides model to allow for two types of formal job contracts: temporary and permanent; and we also allow for self-employment. We show that labor market efficiency as well as access to selfemployment financing played a key role in the evolution of employment in Chile during the last 15 years. Additionally, and not surprisingly, tougher access to financing adversely affects self-employment
... Immigrants in Spain were more severely affected by the crisis, but the difference between native-born and foreign nationals is still more pronounced in Germany, if measured in relative terms. 6 The "wild ride" (Bentolila et al. 2009) of labour market outcomes in Spain is not limited to foreign workers. It is a common attribute and affects all workers in the extensive temporary segment of the market. ...
... We now describe the main features of the model and discuss its properties using graphs (full algebraic details can be found in the companion paper by Bentolila et al., 2010). There are two types of jobs: temporary and permanent (open-ended) jobs, both endowed with the same productivity distribution. ...
... However, the values reflected in either state should ideally be steadystate instead of point-in-time values, which is not assured, especially in Spain where the unemployment rate shows clear signs of high persistence and volatility. To uncover the values of ε, h, m 0 , and μ, we use four equations defining four key variables in the labor market which are computed using the French and Spanish Labor Force Surveys (see Bentolila et al., 2010, for details). Lastly, the results derived from above-mentioned model are complemented in the simulation exercises with an alternative specification. ...
Nuestro objetivo es explicar la sorprendente diferencia en la respuesta del paro entre España y otras economías europeas, en particular la francesa, durante la actual recesión. La tasa de paro española, que cayó del 22% en 1994 al 8% en 2007, alcanzó el 19% a finales de 2009, mientras que la francesa apenas ha subido en 2 puntos porcentuales durante la crisis. En este trabajo defendemos que las instituciones laborales de las dos economías son parecidas, salvo por la mayor brecha entre los costes de despido de los contratos indefinidos y los temporales que se da en España, lo que conduce a unos altísimos flujos de trabajadores temporales de entrada en el desempleo y salida de él. Estimamos, en el contexto de una economía simulada, que más de la mitad del aumento de la tasa de paro se habría evitado si España hubiera adoptado unas instituciones de protección del empleo parecidas a las de Francia antes del inicio de la recesión.
Using the Colombian Annual Manufacturing Survey (AMS) between 2000 and 2014, this paper investigates the effect of labor contract modalities on firm productivity within the industrial sector through a structural model. We find that the elasticity of revenue with respect to temporary workers is often lower than that with respect to permanent workers, but not in small firms, where some forms of flexibility might lead to productivity gains.
El Capítulo I aborda la distribución funcional de la renta, es decir, la distribución del PIB entre los factores productivos que han contribuido a su obtención. El interés de analizar la distribución de la renta desde una perspectiva funcional es su utilidad para comprender y analizar tanto la evolución de la masa salarial, principal determinante del consumo y la demanda agregada, como de la rentabilidad del capital, factor clave en los procesos de inversión y acumulación del capital. Adicionalmente, y no por ello menos importante, el análisis funcional resulta de gran utilidad para comprender los determinantes de la desigualdad de la distribución personal de la renta, en la medida que las rentas del trabajo constituyen la principal fuente de renta de los hogares y, al mismo
tiempo, permite establecer un nexo de unión entre los resultados macroeconómicos y lo que les sucede a las personas. La Contabilidad Regional de España, base 2010, es la fuente estadística de referencia de este capítulo, dado que Castilla
y León, a diferencia de otras comunidades autónomas, no elabora una Contabilidad Regional propia. El capítulo comienza con un estudio de la dinámica económica y poblacional de Castilla y León. A continuación, examina cómo se distribuyen las rentas primarias generadas en el proceso de producción y se contrasta si, en Castilla y León, al
igual que en la mayoría de los países de nuestro entorno, ha descendido el peso de las rentas salariales. Por último, para destacar los vínculos entre la distribución funcional y personal de la renta, se estudian las distintas fuentes de renta de
los hogares, desde su origen en el mercado hasta la renta disponible, desde un punto de vista macroeconómico. Las rentas procedentes del trabajo constituyen una parte esencial del análisis tanto de la distribución personal como de
la distribución funcional de la renta. Precisamente, el Capítulo II caracteriza los salarios en Castilla y León y en España, así como las pensiones y las prestaciones por desempleo, a partir de la estadística del Mercado de Trabajo y Pensiones en
las Fuentes Tributarias. Se trata de una fuente con un gran potencial por su carácter casi censal, por su regularidad y por contener información fidedigna, lo que la convierte en una estadística complementaria a otras habitualmente utilizadas
en el estudio de este tipo de rentas y de su desigualdad.
En este capítulo, en primer lugar, se ofrece una visión global de lo que ha ocurrido con los tres tipos de retribuciones señalados y el tipo de perceptores de cada una de ellas en el periodo 2000-2014, estudiando, siempre que resulte viable,
su distribución a nivel provincial. En segundo lugar, se analizan de forma pormenorizada para Castilla y León el comportamiento de las anteriores magnitudes por sexo y, en el caso de los asalariados y sus rentas, también de acuerdo con la
edad. Por último, se realiza una aproximación a la medición de la desigualdad en las rentas salariales. El Capítulo III inicia el análisis de la la distribución personal de la renta que, como hemos indicado, tiene que ver con
la forma en que la renta se distribuye entre las personas. El interés fundamental de la distribución personal de la renta es su estrecha relación con el bienestar de la sociedad y su utilidad para complementar y matizar la información que suministran los grandes agregados macroeconómicos. Las opciones metodológicas que se han elegido son fundamentalmente las utilizadas por Eurostat para construir los
indicadores de pobreza y desigualdad dentro de la política social de la Unión Europea, siendo la Encuesta de Condiciones de Vida (ECV), base 2013, la fuente de información estadística empleada. En este capítulo, en primer lugar, se ofrece una visión de conjunto de la distribución personal de la renta en Castilla y
León y en España, utilizando principalmente el análisis gráfico. A continuación, se analiza la evolución del nivel de renta de las personas a través de las medidas estadísticas más utilizadas en los estudios de distribución de la renta. En tercer
lugar, se estudia la evolución de la desigualdad y, finalmente, se aborda el análisis de la pobreza. Los determinantes de la distribución personal de la renta son analizados en el Capítulo IV, a partir de las Encuestas de
Condiciones de Vida de los años 2008 y 2015. El capítulo comienza con el estudio de la influencia en el nivel económico de ciertas características de la personas como son el sexo, la edad o el nivel de educación, y de determinados rasgos
de los hogares en los que residen como son el grado de urbanización de la zona en la que esté ubicada la vivienda, la intensidad del trabajo en el hogar o si el hogar tiene niños dependientes o no. El capítulo continúa con un estudio de la
repercusión de los factores mencionados en la desigualdad y la pobreza. Finalmente, se estudia el papel de las Administraciones Públicas sobre la distribución personal de la renta, mediante el análisis del impacto de los impuestos directos
y de las prestaciones sociales. El Capítulo V aborda las cuestiones territoriales del análisis distributivo. En concreto, se compara la distribución
personal de la renta de Castilla y León con la del resto de las comunidades autónomas y con la de los países de la Unión Europea. Asimismo, se lleva a cabo una aproximación a la distribución personal de la renta desde una perspectiva municipal.
