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Does deregulation decrease unemployment? An empirical analysis of the Spanish labour market
Author(s) -
HERRERO Daniel,
CÁRDENAS Luis,
LÓPEZ GALLEGO Julián
Publication year - 2020
Publication title -
international labour review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.433
H-Index - 46
eISSN - 1564-913X
pISSN - 0020-7780
DOI - 10.1111/ilr.12179
Subject(s) - deregulation , unemployment , economics , collective bargaining , labour economics , panel data , structural unemployment , macroeconomics , econometrics
Spain underwent two major labour reforms in 2010 and 2012 under the assumption that deregulating the labour market and decentralizing collective bargaining would automatically reduce unemployment (deregulation hypothesis). This article highlights the impact of demand and the sectoral structure of the economy to explain the behaviour of this variable (structural hypothesis). Analysing subnational panel data, the authors assess the capacity of these two hypotheses to explain unemployment trends. Their results cast doubt on the deregulation hypothesis and indicate the importance of cyclical and structural factors.