DP1184 Why is Spanish Unemployment so High?

Author(s): Juan J. Dolado, Juan F Jimeno
Publication Date: May 1995
Keyword(s): Persistence, Shocks, Spain, Unemployment
JEL(s): E6, J3, J4, J5
Programme Areas: Human Resources
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=1184

In this paper we analyse the underlying causes behind Spanish unemployment which is now at 24%. We interpret this unfortunate outcome as the result of a series of adverse shocks, compounded by disinflationary policies and by a flawed system of labour market institutions. Our aim is to explain the main sources of shocks to unemployment, and the most relevant features of their transmission mechanism. To do so we use a structural VAR approach in modelling the Spanish labour market.