Two-Tier Labor Markets in the Great Recession: France vs. Spain
By S. Bentolila, Juan José Dolado Llobregad, Pierre Cahuc, T. L. Barbanchon. Social Science Research Network, 2010
273 citations recorded by the source corpus.
This paper analyzes the strikingly different response of unemployment to the Great Recession in France and Spain. Their labor market institutions are similar and their unemployment rates just before the crisis were both around 8%. Yet, in France, unemployment rate has increased by 2 percentage points, whereas in Spain it has shot up to 19% by the end of 2009. We assess what part of this differential is due to the larger gap between the dismissal costs of permanent and temporary contracts and the less restrictive rules regarding the use of the latter contracts in Spain. Using a calibrated search and matching model, we estimate that about 45% of the surge in Spanish unemployment could have been avoided had Spain adopted French employment protection legislation before the crisis started.
Subfields: Economics and Econometrics, Political Science and International Relations
View Paper: https://www.semanticscholar.org/paper/ed99ca0689cccae7555ae785c93e7a94ad52f012
How researchers see this paper
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In Economics and Econometrics
- D. Leigh
- N. Ramesh
- Miaomiao Zhang
- Ting Liu
- Tolga Tasdizen
- Mehran Javanmardi
- Laurence Ball
- Prakash Loungani
In Political Science and International Relations
Citations in the corpus
- Okun's Law: Fit at Fifty? (2013, background): “We also find no relationship between the Okun coefficient and the various components of the EPL index. is that the OECD does not account for the non-enforcement of de jure restrictions on fixedterm contracts (Bentolila et al., 2010).”
- Segmentation (2019, result): “Bentolila et al. (2010) report a similar pattern of adjustment in Spain.”