Aitor Lacuesta

Assimilation of immigrants in Spain: a longitudinal analysis

In this paper we use the Continuous Sample of Working Histories 2005 (MCVL2005) to analyze the earnings assimilation of migrants from outside the EU-15 in Spain. Using our panel dataset we show that immigrants reduce around the half of the initial wage gap respect to natives the first 5 to 6 years after arrival. However, no further reductions of the remaining wage gap are estimated. We also show that results based on cross-section data are downward biased since an important increase in the quality of migrants has taken place over the recent years. This skill upgrading of new immigrant cohorts is evident in the Spanish case as well as the depreciation of the value of most of the experience that is brought from abroad. We can associate the improvement in the skill of immigrants to a change in the composition of new entrants. An important mechanism underlying the assimilation is the higher likelihood of recent immigrants in changing jobs among different sectors and firms, but also improving their situation within the same firm. Finally, some caveats should be taken into account when interpreting our results given that immigration phenomenon is quite recent in the Spanish labour market and it has taken place in an especially positive economic environment.

The Schooling Response to a Sustained Increase in Low-Skill Wages: Evidence from Spain 1989-2009

The response of human capital accumulation to changes in the anticipated returns to schooling determines the type of skills supplied to the labor market, the productivity of future cohorts, and the evolution of inequality. Unlike the US, the UK or Germany, Spain has experienced since 1995 a drop in the returns to medium and tertiary education and, with a lag, a drop in schooling attainment of recent cohorts, providing the opportunity to estimate the response of different forms of human capital acquisition to relative increases in low-skill wages. We measure the expected returns to schooling using skill-specific wages bargained in collective agreements at the province-industry level. We argue that those wages are easily observable by youths and relatively insensitive to shifts in the supply of workers. Our preferred estimates suggest that a 10% increase in the ratio of wages of unskilled workers to the wages of mid-skill workers increases the fraction of males completing at most compulsory schooling by between 2 and 5 percentage points. The response is driven by males from less educated parents and comes at the expense of students from the academic high school track rather than the vocational training track.

Omitted Variables in the Measure of a Labour Quality Index: The Case of Spain

Traditional measures of labour quality might have the shortcoming of missing some features of the very important increase in labour utilization within European countries. In particular, we explore the case of Spain. Despite showing one of the most important increases in labour quality in the EU according to standard methods, it also offers a negative increase in TFP growth. This paper computes an index of labour quality in Spain between 1988 and 2006 using microdata from the Labour Force Survey and the Structural Earnings Survey-2002 that allows the introduction of all possible interactions in a semi-parametric fashion between gender, age, education, experience in the current job and nationality. Considering those observable characteristics, the index still shows a notable growth at an average annual rate of 0.42 pp. After a period of slight decline (between 1988 and 1992) the index grows continuously until 2006 when it fell again. This is the case because education is, even by considering all possible interactions with other demographic variables, the highest contributor to the quality index’s growth. However, the paper shows the importance of considering changes in average productivities of different socio-demographic groups over time. We include in the analysis two usually omitted variables that help explaining the recent productivity slowdown in Spain: type of occupation held by the individual and unobserved heterogeneity of workers. Both the inclusion of occupation and especially the entry of individuals with below-average productivity levels compared to precedent periods decrease the labour quality growth to an average annual rate of 0.20 pp. Indeed with the addition of these two factors labour quality slightly decreases from 1997 onwards.

Spain: From Immigration to Emigration?

Since the start of the Great Recession the unemployment rate in Spain has risen by almost 18 percentage points. The unemployment crisis is affecting all population groups, including the more highly educated; but it is even more acute for the foreign population, whose unemployment rate is close to 40%. This situation follows a period of very high immigration flows (1995-2007) that set the number of foreigners living in Spain at 11% of the population. This paper documents the characteristics of recent migration flows to Spain and compares how foreign and Spanish nationals are moving abroad and across Spanish regions in response to the unemployment crisis. Building on this comparison, we shed some light on the selection of migrants by educational level and offer conjecture as to the implications of the migration outflows observed in recent years.

Employment Polarisation in Spain Over the Course of the 1997-2012 Cycle

This article analyses changes in the occupational employment share in Spain for the period 1997-2012 and the way particular sociodemographics adapt to those changes. There seems to be clear evidence of employment polarisation between 1997 and 2012, which accelerates over the recession. Changes in the composition of the labour supply cannot explain the increase in the share of occupations at the low end of the wage distribution. Sector reallocation might have partially contributed to explaining the polarisation process in Spain during the years of expansion (1997-2007), but it is a minor factor during the recession. The polarisation of occupations within sectors observed especially during the recession appear to be related to a decline in routine tasks. This is compensated by an increase in occupations with non-routine service contents, which are found both at the low and high end of the wage distribution. Instead, abstract content-intensive jobs do not appear to increase their share in total employment during these 15 years. The paper finds that this process has affected males more than females because of the higher concentration of the former in more routine-intensive occupations. Among males, for workers under 30 years we fi nd a decrease in the share of occupations with more routine tasks, which turns into increases in others with more abstract content and particularly with more nonroutine service content. Instead, male workers over 30 years seem to remain in declining occupations to a greater extent. Females of different ages are not affected by the abovementioned changes.

Education, Labour Market Experience and Cognitive Skills: Evidence from PIAAC

We study how formal education and experience in the labour market correlate with measures of human capital available in thirteen countries participating in the Program for the International Assessment of Adult Competences (PIAAC), an international study assessing adults’ proficiency in numeracy and literacy. Two findings are consistent with the notion that, in producing human capital, work experience is a substitute for formal education for respondents with compulsory schooling. Firstly, the number of years of working experience correlates with performance in PIAAC mostly among low-educated individuals. Secondly, individual fixed-effect models suggest that workers in jobs intensive in numerical tasks – relative to reading tasks – perform relatively better in the numeracy section of the PIAAC test than in the reading part. The results are driven by young individuals with low levels of schooling and hold mainly for simple tasks, suggesting that our findings are not fully generated by the sorting of workers across jobs. A back-of-the-envelope estimate suggests that the contribution of on-the-job learning to skill formation is a quarter of that of compulsory schooling in the countries we analyse.

Mothers' Quest for Job Protection: Building the Nest or Breaking the Glass Ceiling? Evidence Using Spanish Longitudinal Data

Previous research has found that temporary contracts delay marriage and fertility in Spain. Using newly released administrative data we study the motivations behind the fertility delay that is associated with job protection. We find that during the five years after the birth of the first child mothers in protected jobs promote less and their wages grow less (16 per cent) compared to mothers that had a fixed-term contract at the time of childbirth. The poor after-birth outcomes of mothers in protected jobs contrasts with their better performance before birth, with wages growing more rapidly than those of other women and other mothers. We provide evidence that a permanent contract acts as insurance against the negative wage effects of motherhood, but at the price of less wage growth. We also find that mothers that had a permanent contract at childbirth reduce their working time more, forgo opportunities of promotion outside the firm and have a lower return to each additional year of experience compared to mothers with a temporary contract. Our interpretation of these results is that job protection helps mothers conciliate work and family responsibilities rather than to achieve professional success.

An Exploration of Real-Time Revisions of Output Gap Estimates Across European Countries

This document analyses real-time revisions in output gap estimates published by the European Commission for 15 countries over the period 2002-2014. We find that output gap revisions (both in levels and changes) are mainly driven by GDP growth forecast errors. Also, output gap revisions have opposite signs across expansions and recessions: real-time output gaps are downward biased (smaller than the final estimates) during expansions and upward biased (higher than the final estimates) in recessions. Our findings may have relevant implications for the conduct and assessment of fiscal policy in real time. For instance, according to our results, real-time estimates of the structural balance would be upward biased in expansions and downward biased in recessions. This implies that the fiscal stance of an economy estimated in real time would be excessively expansionary in recessions as compared to the final estimate. As a result, we argue that corrections to real-time estimates of the structural balance suggested in the literature should be contingent on the degree of slack in the economy.