During the last two decades many EU countries have reformed the set of legal rules that regulate dismissals. In contrast with other institutional reforms of the labour market, there seems to be a common strategy of maintaining strict employment protection legislation for workers under the...

This paper presents a case study on reforming a very dysfunctional labour market with a deep insider-outsider divide, namely the Spanish case. We show how a dual market, with permanent and temporary employees makes real reform much harder, and leads to purely marginal changes that do not alter...

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...

The Phillips curve has flattened in Spain over 1995-2006: unemployment has fallen by 15 percentage points, with roughly constant inflation. This change has been more pronounced than elsewhere. We argue that this stems from the immigration boom in Spain over this period. We show that the New...

In many countries, Employment Protection Legislation (EPL) establishes different regulations for certain groups of workers who face more disadvantages in the labour market (young workers, women, unskilled workers, etc.) with the aim of improving their employability. Well-known examples are the...

This paper examines the empirical evidence regarding the poor performance of the youth labour market in Spain over the last two decades, which entails very high unemployment for both higher and lower educated workers, symptoms of over-education, and low intensity of on-the-job training. It also...

This paper considers a matching model with heterogeneous jobs (unskilled and skilled) and workers (low- and high-educated) which allows for on-the-job search by mismatched workers. The latter are high-educated workers who transitorily accept unskilled jobs and continue to search for skilled...

This paper studies the joint behaviour of inflation and unemployment in Spain over the period 1964–95 in order to estimate dynamic Phillips trade-offs and sacrifice ratios in response to a demand shock. We organize our empirical approach as a structural (albeit eclectic) one. In so doing, we...

Spain and Portugal are two neighbour economies which share many characteristics. Spanish unemployment is more than double Portuguese unemployment, however. In this chapter we resort to Structural Vector Autoregression (SVAR) techniques to ascertain which shocks and what propagation mechanism...