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Juan A. Sanchis-llopis and Antonio Cutanda
''The Spanish cyclicality of the user cost of labour''
( 2020, Vol. 40 No.3 )
This paper contributes to the study of the Spanish unemployment puzzle: while unemployment and temporary employment rates are among the highest in the E.U., productivity is very low and wages show a rigidity similar to other European countries. We estimate the sensitivity of the user cost of labour (and wages) to aggregate unemployment (i.e., cyclicality), using a pseudo-panel built by combining two Spanish microeconomic surveys (the Labour Force Survey and the Family Expenditure and Income Survey) for the period 1987-1997. We find that the user cost of labour is more procyclical than average wages, what provides evidence of wage rigidity.
Keywords: Cyclicality, user cost of labour, pseudo-panel data
JEL: J3 - Wages, Compensation, and Labor Costs: General
E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment: General (includes Measurement and Data)
Manuscript Received : Jan 21 2020 Manuscript Accepted : Jul 14 2020

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