Job Creation in Spain: Productivity Growth, Labour Market Reforms or Both?

• Autores: Javier Andrés Domingo, José Emilio Boscá Mares, Rafael Doménech Vilariño, Javier Ferri Carreres
• Localización: XVII Encuentro de Economía Pública: políticas públicas ante la crisis, 2010, pág. 49
• Idioma: inglés
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• Dialnet Métricas: 5 Citas
• Resumen

  • The benefits implied by changing the growth model are in the center of the political and economic debate in Spain. Addressing the labour force to the more innovative sectors and increasing productivity standards in the traditional ones is defended as the panacea for most of the ills afflicting the Spanish economy. In this paper we use a DSGE model with price rigidities, and a labour market behaving a la Mortensen-Pissarides, to assess the benefits of the change in the growth model on unemployment. To do that, we substitute a demand shift, as the one supposed to have driven the Spanish growth in the near past, by a productivity shock, more consistent with the new growth model. We show that the time span required for reducing unemployment rate to European average levels increases. We then propose four points for a reform of the labour market, and evaluate the interaction between the labour reform and the new growth model. We conclude that any point of the proposal works in the correct direction, in terms of unemployment reduction, and that the reform acts, de facto, as a mechanism of worksharing, reducing hours per worker for a lower unemployment rate.