Abstract
Over the last decades, the Spanish economy has stood out as the advanced country with the highest unemployment rate. This outrageous figure has encouraged many international researchers to embark on the study of this phenomenon from different perspectives, with the hope of coming up with an adequate solution. In addition to being exceptionally high, the Spanish rate of unemployment has also turned out to be abnormally persistent, as many econometric studies have highlighted. Empirical work using unit root and stationarity tests has tried to discriminate among alternative macroeconomic schools/paradigms as regards the distinct approach to the labour market. In the case of the Spanish unemployment rate, the majority of such work overall points to a highly hysteretic scenario.
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Notes
- 1.
Digging deeper into the terminology, the (full) hysteresis case implies that every temporary shock affects unemployment permanently, thus making the traditional concept of natural rate irrelevant (Karanassou and Snower 1997). On the other hand, the partial hysteresis or persistence case entails that temporary shocks have long-lasting but not permanent effects. The hysteresis case can be modelled as a unit root process while the persistence one as a near unit root.
- 2.
There are some alternative econometric approaches which could also be employed to measure persistence: fractional integration, estimation of half-lives in the presence of a disturbance, etc.
- 3.
- 4.
The long-term unemployment problem has virulently returned as a result of the current economic crisis. Thus, throughout the second quarter of 2013, around 60 % of the unemployed were out of work for more than 12 months.
- 5.
Due to the 1984 labour reform, which gave birth to a regularly used non-causal fixed-term contract with low severance pay, the Spanish temporary employment rate climbed from roughly 12 % to a number that has been hovering around 30–35 % since 1990, thereby doubling the European Union average. This number has declined approximately 10 % points during the current crisis owing to the intense destruction of temporary employment. On the problem of excessive temporary employment predicament in Spain, see for example Dolado et al. (2002).
- 6.
As a proposal based on search and matching models endorsing the use of the single open-ended contract, see Costain et al. (2010) and García-Pérez and Osuna (2012). In these papers, the authors contend that such a type of contract induces better dynamics in the labour market than the dual employment protection legislation.
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García-Cintado, A., Romero-Ávila, D., Usabiaga, C. (2014). Introduction. In: Spanish Regional Unemployment. SpringerBriefs in Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-03686-1_1
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