The Spanish Productivity Puzzle in the Great Recession

36 Pages Posted: 17 Jan 2015

See all articles by Laura Hospido

Laura Hospido

Banco de España - Research Department

Eva Moreno-Galbis

Université du Maine

Multiple version iconThere are 2 versions of this paper

Date Written: January 16, 2015


While Spain has traditionally underperformed its European peers in terms of labor productivity, the trend reverses after 2007. The evolution of aggregate productivity in Spain during the Great Recession is shaped largely, albeit not exclusively, by the adverse conditions in the labor market. Using a longitudinal sample of Spanish manufacturing and services companies between 1995 and 2012, we show that the recent increase in Spanish aggregate productivity is also responsive to the behavior of total factor productivity (TFP) and to composition effects. By combining the information at firm level on balance sheet items, collective agreements and imports-exports, we are able to establish that a collective agreement at the firm level and access to external markets are positively related to TFP performance during the whole period. In addition, our estimates indicate that firm TFP was negatively correlated to the proportion of temporary workers during the expansionary period, 1995-2007, whereas the sign of that correlation reversed during the crisis, 2008-2012. Finally, we relate this sign reversal to the changing composition of temporary workers in the labor market.

Keywords: labor productivity, TFP, temporary workers, collective agreements, exporting firms

JEL Classification: J24, J21, J52

Suggested Citation

Hospido, Laura and Moreno-Galbis, Eva, The Spanish Productivity Puzzle in the Great Recession (January 16, 2015). Banco de Espana Working Paper No. 1501, Available at SSRN: or

Laura Hospido (Contact Author)

Banco de España - Research Department ( email )

Alcala 48
Madrid, 28014
+34 913385625 (Phone)
+34 913385678 (Fax)


Eva Moreno-Galbis

Université du Maine ( email )

72085 Le Mans Cedex 9

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