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The Cycle of Earnings Inequality: Evidence from Spanish Social Security Data
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- Published: 03 April 2018
Bonhomme, S. and Hospido, L. (2017): The Cycle of Earnings Inequality: Evidence from Spanish Social Security Data, The Economic Journal, 127, 1244-1278
Abstract
We use detailed information from social security records to document the evolution of male earnings inequality and employment in Spain from 1988 to 2010. We find that inequality was strongly countercyclical: it increased around the 1993 recession, experienced a substantial decrease during the 1997–2007 expansion and then a sharp increase during the recent recession. This evolution went in parallel with the cyclicality of employment in the lower middle part of the wage distribution. Our findings highlight the importance of the housing boom and bust in this evolution, suggesting that demand shocks in the construction sector had large effects on aggregate labour market outcomes.
The effect of permanent employment on absenteeism: Evidence from labor reform in Spain
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- Published: 05 March 2018
García-Mainar, I., Green, C.P. and Navarro-Paniagua, M. (2018): The effect of permanent employment on absenteeism: Evidence from labor reform in Spain, ILR Review, 71 (2), 525-549.
Abstract
Restrictive employment protection legislation has been highlighted as a key reason for lower labor productivity in Europe compared to the United States. Evidence in the literature has shown robust effects of employment protection on effort, though the effects appear too small to generate marked cross-country differences in labor productivity. The authors revisit this issue using representative data of private-sector workers in Spain. A range of legislative changes aimed at reducing the incidence of temporary employment are used to estimate the effect of permanent employment on one aspect of effort, absenteeism. Results suggest that being employed on a permanent contract increases the probability of being absent from work due to sickness by approximately 5.3 percentage points and the time absent by approximately 0.30 of a day per week. These results suggest that cross-country differences in employment protection have the potential to have a substantial impact on labor productivity.