Catastrophic job destruction during the Portuguese economic crisis
Anabela Carneiro (),
Pedro Portugal and
Jose Varejao ()
No 24, Special Conference Papers from Bank of Greece
In this article we study the resilience of the Portuguese labor market, in terms of job flows, employment and wage developments, in the context of the current recession. We single out the huge contribution of job destruction, especially due to the closing of existing firms, to the dramatic decline of total employment and increase of the unemployment rate. We also document the very large increase in the incidence of minimum wage earners and nominal wage freezes. We explore three different channels that may have amplified the employment response to the great recession: the credit channel, the wage rigidity channel, and the labor market segmentation channel. We uncover what we believe is convincing evidence that the severity of credit constraints played a significant role in the current job destruction process. Wage rigidity is seen to be associated with lower net job creation and higher failure rates of firms. Finally, labor market segmentation seems to have favored a stronger job destruction that was facilitated by an increasing number of temporary workers.
Keywords: Job Destruction; Credit constraints; Wage rigidity; Segmentation (search for similar items in EconPapers)
JEL-codes: E24 J23 J63 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ltv and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11) Track citations by RSS feed
Downloads: (external link)
http://www.bankofgreece.gr/BogEkdoseis/SCP201324.pdf Full Text (application/pdf)
Journal Article: Catastrophic job Destruction during the Portuguese Economic Crisis (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bog:spaper:24
Access Statistics for this paper
More papers in Special Conference Papers from Bank of Greece Contact information at EDIRC.
Bibliographic data for series maintained by Christina Tsochatzi ().