The Effect of Unemployment Spells on Subsequent Wages in Spain

Universitat Pompeu Fabra Economics WP No. 295

Posted: 29 Nov 1998

See all articles by Alfonso Rosolia

Alfonso Rosolia

Bank of Italy

Gilles Saint-Paul

University of Toulouse I - GREMAQ-IDEI; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Abstract

In our analysis we try to recover the wage loss from unemployment in Spain and see how it is affected by previous unemployment experience, unemployment duration, eligibility for unemployment benefits, and previous wages. We also study its variations across groups. Our main conclusion is that while there is some evidence that labor market rigidities tend to lower it, the wage loss of displaced workers is remarkably high: more than 30%, that is, twice the equivalent figure for the U.S. and France. Wages in Spain suffer from a serious mismeasurement problem that we do our best to control, so that our results are less robust than the ones that would be obtained with better data sets. However, they indicate a large level of wage flexibility in Spain.

JEL Classification: J6

Suggested Citation

Rosolia, Alfonso and Saint-Paul, Gilles, The Effect of Unemployment Spells on Subsequent Wages in Spain. Universitat Pompeu Fabra Economics WP No. 295. Available at SSRN: https://ssrn.com/abstract=108115

Alfonso Rosolia (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
00184 Roma
Italy
0039 06 4792 3077 (Phone)

Gilles Saint-Paul

University of Toulouse I - GREMAQ-IDEI ( email )

Manufacture des Tabacs
21 Allees de Brienne
Toulouse, 31000
France
+33 5 6112 8544 (Phone)
+33 5 6122 5563 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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