Two-Tier Labor Markets in the Great Recession: France vs. Spain
Juan Dolado,
Samuel Bentolila,
Pierre Cahuc and
Thomas Le Barbanchon
No 8152, CEPR Discussion Papers from C.E.P.R. Discussion Papers
Abstract:
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.
Keywords: Temporary contracts; Unemployment; Great recesssion (search for similar items in EconPapers)
JEL-codes: H29 J23 J38 J41 J64 (search for similar items in EconPapers)
Date: 2010-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (84)
Downloads: (external link)
https://cepr.org/publications/DP8152 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
Related works:
Working Paper: Two-Tier Labor Markets in the Great Recession: France vs. Spain (2010) 
Working Paper: Two-Tier Labor Markets in the Great Recession: France Vs. Spain (2010) 
Working Paper: Two-Tier Labor Markets in the Great Recession: France vs. Spain (2010) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:8152
Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP8152
Access Statistics for this paper
More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().