In Discussion Paper No. 1398, Pablo Antolin examines gross worker flows into and out of unemployment in Spain for the period 1977–84. Recent changes in the Spanish labour market seem to have increased the magnitude and variability of flows in and out of unemployment, but do not seem to have affected the acyclical behaviour of unemployment outflows.

Furthermore, some structural factors appear to have been at work during the economic recession of the early 1990s, altering the inflows, but not the outflows. While the behaviour of inflows explains the recent increase in unemployment, the failure of outflows to respond both to cyclical and other economic factors accounts for the persistence of higher unemployment. The Spanish evidence on gross worker flows can be reasonably explained by the existence of a dual labour market comprising permanent and temporary job contracts.

Gross Worker Flows: How Does the Spanish Evidence Fit the Stylized Facts?
Pablo Antolin