In Portugal real wage flexibility, at the macroeconomic level, is noticeably higher while unemploymem duration is lower when compared to Spain. This suggests that the hardship of being unemployed is higher in Portugal. Unemployment benefits and family insurance, which are the main buffer against unemployment and have played difterent role in both countries, can explain this disparity. In this chapter we present some estimates of the loss of consumption suffered by unemployed workers relative to employed workers in Portugal and Spain. The estimates come form comparable data sets (cross-sections of the Household Budget Surveys). Our resuits confirm our prior: this loss is much more sizeable in Portugal
