Regional structure of wages and external economies in Spain

Regional data on wages for the Spanish economy show that workers who live in developed regions earn more than workers in other regions. Literature on external economies provides a possible explanation of why firms do not move from these regions to others where wages are lower. Previous studies for the Spanish case use aggregated sectoral data to explain in terms of external economies why average wages are different across regions. The original contribution of this paper consists of using individual data to detect the existence and nature of external economies as an explanatory cause of territorial wage differences. With this aim, we have used individual data from the EPF 1990-91 (INE). This information permits us to control the influence of individual and job characteristics on wages to, first, detect the existence of external economies and, second, to test alternative explanations of their presence. The empirical evidence obtained confirms the relevance of territorial external economies and their influence on wages, as a result of improvements in the productive efficiency of the firm. In concrete terms, the more relevant external economies are associated with the regional human capital stock and geographical productive specialisation- Los datos sobre salarios provinciales muestran la existencia de diferencias salariales geográficas de considerable magnitud. Algunos estudios disponibles para el caso español tratan de explicar dichas diferencias en términos de economías externas utilizando para ello datos sobre salarios medios sectoriales. La principal aportación de este trabajo reside en el empleo de datos individuales para detectar la existencia y averiguar la naturaleza de las economías externas que afectan a los salarios de un territorio. Los datos individuales utilizados proceden de la EPF 1990/91. La información estadística disponible ha permitido controlar la influencia de las características individuales y del puesto de trabajo sobre el salario con el objetivo de, primero, detectar la existencia de economías externas y, después, conocer el origen y naturaleza de las mismas. La evidencia empírica obtenida confirma la relevancia de las economías externas territoriales y su influencia positiva sobre los salarios, como resultado de las mejoras aportadas a la eficiencia productiva de las empresas localizadas en dicho territorio. En concreto, las economías externas más importantes son las generadas por el stock de capital humano provincial y por la especialización del territorio

Further Evidence on Disaggregated Wage Curves: The Case of Spain

Individual data from the Spanish Family Budget Survey (EPF 1990-1991) are used to estimate disaggregated wage curves (industry sector, gender, age, schooling, and occupation). The results show a wage curve for all employees with an elasticity of -0.13. It is also concluded that less protected labour market groups - young workers, manual workers and building sector workers - have a higher elasticity of wages to local unemployment. These results indicate a greater facility of firms in these segments to set wages as a function of the unemployment rate and they are supportive of efficiency wage theoretical models

Overeducation and local labour markets in Spain

The objective of this paper is to analyse the influence of individual variables and some spatial mobility characteristics of regional labour markets on overeducation in Spain. To achieve this aim, we use microdata from the Spanish Budget Household Survey to estimate a probit model for the probability of overeducation while accounting for sample selection and the presence of data at different levels (individuals and territory). The obtained results permit us to conclude that the sizes of local labour markets and the possibility of extending the job search to other labour markets by commuting are relevant factors in explaining overeducation in the Spanish labour market. In spite of differences in labour market institutions, our results are very similar to those obtained for other countries, particularly when working with more recent data

Interregional wage differences in Spain. A microdata analysis for 1990

Interregional wage differences in the Spanish economy are of considerable magnitude. More precisely the average wage in Madrid is 69% higher than in Murcia and the figure for Cataluña is 47% higher. The main objective of this paper is to explain these differences. In order to do so, we estimate enlarged Mincer equations and study the quantitative importance of the 'territorial effect' on wages. Then we attempt to explain these effects as compensatory differences or as a result of existent disequilibrium in the provincial labour markets. The evidence obtained allows us to determine the magnitude of the 'territorial effect.' Once the influence of the individual and job characteristics are controlled for, there still remain positive differences slightly greater than 24% between the provinces of Barcelona and Sevilla and about 13% between Madrid and Sevilla. These wage differences are compensating to some extent for differences in the levels of prices, but they do not correspond to the unequal attraction of the Spanish provinces. The differences are explained, finally, by the unequal level of prices and by the irregular distribution of unemployment between provinces, which is shown to have a negative effect on wages close to the magnitude estimated by Blanchflower/Oswald (1994)

Local human capital and external economies: evidence for Spain

It is assumed that human capital external economies can increase factor productivity. However, as human capital is accumulated in an unequal way in the territory, productivity improvements will be different among territories. So, in the presence of labour mobility, wage differences will induce migratory movements that would concentrate population in a given geographical area and increasing housing rents until the net advantage of residing and working in different places is equal. In this paper we estimate wage and housing rents equations following Rauch (1993) model using microdata from the EPF 1990/91. The results offer evidence of local human capital external economies for the Spanish economy

EL MERCADO DE TRABAJO ESPAÑOL EN LA CRISIS ECONÓMICA (2008-2012): DESEMPLEO Y REFORMA LABORAL

In this economic crisis the Spanish labor market has generated unemployment at a rate faster than all OECD countries, reaching the highest rate also. The most immediate cause of this is the massive job losses. The differential in unemployment rate and in job loss cannot be explained by a GDP growth much more negative. Similarly, Spain and the U.S. show job losses beyond what would correspond to the collapse of the building sector.The reasons for the Spanish exceptionality are two: the significant real wage rigidity and the high external flexibility. The article shows that insufficient wage flexibility prevents a wage dynamics according to the productivity growth and limits the wage response to changes in the unemployment rate. External flexibility is based on temporary contracts and generates a high sensitivity of employment and unemployment to changes in GDP growth. The explanation of both characteristics (great facility for external adjustment in the margin and great difficulty in adjusting wages) is the regulations that show the Spanish labour legislation in areas such as collective bargaining and firing costs.The labour market reform of 2012 modifies both elements, but not convincingly resolves contractual duality, which is the main mechanism generating volatility over the business cycle and unemployment in times of recession

Salaries and jobs of migrants in the labour market

Synthesis of the international research on wages and employment of migrants in the labor marke

Los salarios de los inmigrantes en el mercado de trabajo español : ¿importa el origen del capital humano?

El objetivo del trabajo es analizar el papel de los diferentes componentes del capital humano como determinantes de los ingresos de los inmigrantes recientes en el mercado de trabajo español. A partir de los microdatos de la Encuesta Nacional de Inmigrantes 2007, se examina la rentabilidad del capital humano de este colectivo, distinguiendo el adquirido en origen del acumulado en destino, así como el impacto salarial de la situación documental. La evidencia obtenida muestra que el capital humano adquirido en España tiene una mayor rentabilidad marginal que el acumulado en origen, lo que refleja la limitada transferibilidad de este último. La única excepción se da en el caso de los inmigrantes procedentes de países desarrollados o que han estudiado en España, independientemente de su procedencia, los cuales obtienen una rentabilidad de sus estudios -incluso de aquéllos cursados en origen- comparativamente elevada. Una situación legal en España está asociada, por su parte, con una sustancial prima salarial positiva (15%). Por último, el conjunto de la evidencia confirma la presencia de una fuerte heterogeneidad, tanto en la rentabilidad de las diferentes formas de capital humano como en la magnitud de la prima por trabajar legalmente, en función de la zona de origen de los inmigrantes

Labour segregation and immigrant and native-born wage distributions in Spain: an analysis using matched employer-employee data

This article carries out an empirical examination of the origin of the differences between immigrant and native-born wage structures in the Spanish labour market. Especial attention is given in the analysis to the role played by occupational and workplace segregation of immigrants. Legal immigrants from developing countries exhibit lower mean wages and a more compressed wage structure than native-born workers. By contrast, immigrants from developed countries display higher mean wages and a more dispersed wage structure. The main empirical finding is that the disparities in the wage distributions for the native-born and both groups of immigrants are largely explained by their different observed characteristics, with a particularly important influence in this context of workplace and, particularly, occupational segregation