This note tests whether the extraordinary rise in Spanish unemployment in the 1980s can be traced back to rigidities in the earnings structure in the face of relative net demand shocks against the unskilled (this claim is also known as the Krugman hypothesisʺ). I can establish that youth...

This paper investigates whether and in what sense the west German wage structure has been 'rigid' in the 1990s. To test the hypothesis that a rigid wage structure has been responsible for rising low-skilled unemployment, I propose a methodology which makes less restrictive identifying...