José Antonio Herce

Convergence in Social Protection Across EU Countries, 1970-1999

This paper examines the degree of convergence in social protection registered in the European Union during the 1970-99 period. To that end, we use Eurostat data and study the long-run properties of the data set using time series analysis. Our results indicate that there is no evidence of long-run convergence in Social Protection expenditure to GDP ratios. However, we do find evidence of catching-up with respect both to Germany and the EU average for all countries belonging to EU12, except for Greece.

The Reform of the EU's Cohesion Policy

An enlarged EU requires a reformulation of the basic structure that has so far characterized the EUs institutions, finances and common policies. This analysis focuses on the proposal that the EU Commission was made to reform the cohesion policy. There are significant economic implications for Spain and the economic agents must properly understand the key issues and terms of the Commissions proposal and also of the process that enlargement has set in motion in terms of community cohesion - a process that occurs simultaneously as average income increases in Spain as a whole and in each of the countrys regions in relation to the average income in the Union, both before and after enlargement.

Countercyclical Labor Productivity: The Spanish Anomaly

The cyclical pattern of labor productivity has been a subject of discussion in the economic literature for long time with important theoretical implications. Many authors point out the role of labor market institutions as determinants of the cyclical pattern. For these authors, the loss of procyclicality experimented in the United States since the mid-1980s could be explained by decrease of rigidities in labor market. Following the literature, this paper explores the role of labor regulation by analyzing the case of Spain, which has gone in a few years from a strongly procyclical pattern to a counterciclycal one. Our results suggest that the high rigidity in wages and the great flexibility in labor, related to the temporary workers after the 1984 legislative reform, is the main cause of the countercyclical pattern of the Spanish labor productivity. Our findings are in line with previous papers highlighting the crucial influence of labor market institutions over the cyclical pattern.

European Cohesion Policy and the Spanish Economy: Macroeconomic Evaluation and Prospects for Convergence

This paper offers an empirical evaluation of the economic effects of the European Structural and Cohesion aids (or Community Support Frameworks, CSF) received since 1989, or yet to be received until 2006, by Spain, amounting to a total of almost 100 billion euros at 1999 prices. To that end, we use the HERMIN-Spain model. Our results suggest that these CSF packages have contributed significantly to Spanish economic growth and to increase the levels of income and employment. The successive aid programmes received between 1989 and 2006 imply an average increase of almost 0.4 percentage points in the real annual growth rate of the Spanish economy with respect to the situation that would have ensued without the European grants. This translates into an average increase in per-capita income of 638 euros (at 1999 prices) over the entire period, and of 1027 euros per-capita if we refer to the period 2000 through 2006. Without the structural aids, in 2006, the Spanish per-capita income index relative to the average for EU-15 would be, ceteris paribus, almost six percentage points lower. As for the labour market, we estimate that the structural and cohesion funds have, in average terms over the period 1989-2006, generated and/or maintained 2.07 per cent more employment than what would have been the case without them, or some 300 thousand jobs, which implies an average reduction in the rate of unemployment of 0.2 percentage points over the same period. The paper ends with a simulation of the likely consequences to be expected from a reduction in structural and cohesion grants suffered by many Spanish regions that will cease to belong to the Objective 1 club after 2007 as a result of their natural or statistical convergence.