, Volume 5, Issue 2-3, pp 173-195,
Open Access This content is freely available online to anyone, anywhere at any time.
Date: 08 Jul 2014

Wage cyclicality: Evidence from Spain using social security data


Using longitudinal social security data, this study finds evidence of weak real wage cyclicality in Spain throughout 1988–2011. The baseline estimate of a 0.4 % increase in wages in response to a one percentage point decline in the unemployment rate lies in the lower bound of available estimates for developed countries. Wage cyclicality in a rigid labour market like Spain is mainly driven by workers under temporary contracts and newly-hired workers. I calculate the cyclicality of the net present value of wages in new matches—the relevant piece of information for firms posting vacancies, but a rarely available measure—and find that it is well approximated by the cyclicality of wages for newly-hired workers.

I thank Samuel Bentolila, Stéphane Bonhomme, Claudio Michelacci, Diego Puga, one anonymous referee and seminar participants at cemfi for helpful comments. This work contains anonymized statistical data from mcvl cdf 2005–2011 which are used with the permission of Spain’s Dirección General de Ordenación de la Seguridad Social.