Two-Tier Labor Markets in the Great Recession: France vs. Spain
56 Pages Posted: 27 Dec 2010
There are 3 versions of this paper
Two-Tier Labor Markets in the Great Recession: France vs. Spain
Two-Tier Labor Markets in the Great Recession: France vs. Spain
Date Written: December 2010
Abstract
This paper analyzes the strikingly different response of unemployment to the Great Recession in France and Spain. Their labor market institutions are similar and their unemployment rates just before the crisis were both around 8%. Yet, in France, unemployment rate has increased by 2 percentage points, whereas in Spain it has shot up to 19% by the end of 2009. We assess what part of this differential is 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. Using a calibrated search and matching model, we estimate that about 45% of the surge in Spanish unemployment could have been avoided had Spain adopted French employment protection legislation before the crisis started.
Keywords: Great Recesssion, temporary contracts, unemployment
JEL Classification: H29, J23, J38, J41, J64
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Consequences of Employment Protection? the Case of the Americans with Disabilities Act
By Daron Acemoglu and Joshua D. Angrist
-
Temporary Jobs: Stepping Stones or Dead Ends?
By Alison L. Booth, Marco Francesconi, ...
-
Temporary Jobs, Employment Protection and Labor Market Performance
By Pierre Cahuc and Fabien Postel-vinay
-
The Cost of Job Security Regulation: Evidence from Latin American Labor Markets
By James J. Heckman and Carmen Pages
-
Why Do Temporary Help Firms Provide Free General Skills Training?
-
Drawing Lessons from the Boom of Temporary Jobs in Spain
By Juan Jose Dolado, Carlos García Serrano, ...
-
Drawing Lessons from the Boom of Temporary Jobs in Spain
By Juan F. Jimeno, Juan Jose Dolado, ...
-
Why Do Temporary Help Firms Provide Free General Skills Training?