[Journal:] SERIEs - Journal of the Spanish Economic Association [ISSN:] 1869-4195 [Volume:] 5 [Year:] 2014 [Issue:] 2/3 [Pages:] 173-195
Using longitudinal social security data, this study finds evidence of weak real wage cyclicality in Spain throughout 1988 - 2011. The baseline estimate of a 0.4 % increase in wages in response to a one percentage point decline in the unemployment rate lies in the lower bound of available estimates for developed countries. Wage cyclicality in a rigid labour market like Spain is mainly driven by workers under temporary contracts and newly-hired workers. I calculate the cyclicality of the net present value of wages in new matches - the relevant piece of information for firms posting vacancies, but a rarely available measure - and find that it is well approximated by the cyclicality of wages for newly-hired workers.
Wage cyclicality Labour market duality Social security data Censoring