JIA Cardiff

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Detroit Industry, North Wall (Ford Plant at River Rouge). 1932-1933. Diego Rivera.

LONG-RUN CHANGES IN THE EMPLOYMENT STRUCTURE IN SPAIN

José-Ignacio Antón University of Salamanca (Spain)

Contents of the presentation

1. Introduction

2. Methodology

3. Data

4. Results

5. Discussion

2

3

1. Introduction

Background Relevant literature focused on inequalities in developed

countries. Explanations based on market forces -technology, international

trade, returns to education- (versus institutional features) that refers to ‘unaivodable’ labour market issues.

Relevant amount of literature focusing on employment

polarisation (David Autor, Alan Manning, Erik Olin Wright, Eurofound…) across Economics, Sociology, Industrial Relations, etc.

4

“Quality”

Employment

Computerization allows subsituting middle-skilled jobs (with high-routine content) by machines. Low-skilled and high-skilled workers cannot be replaced in the same fashion.

5

1. Introduction

Background Most work is centred on Anglo-Saxon countries (US, UK). One fits all? Some say polarisation is not widespread polarisation is not likely to be explained by the technical

change/routinisation hypothesis (degree of changes, types of jobs, timing).

6

1. Introduction

Aims of the paper Part of a research contract with Eurofound. Exploring long-run trends with an uniform methodology. Informative for the evolution of labour market inequalities Spain,

with very bad databases before mid 90s. Some light on some aspects of the polarisation debate

(plausibility of the explanation).

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1. Introduction

Advancing some preliminary results Since the late 70s, modernisation of Spanish economy and

labour market: de-primarisation, de-industrialisation, rise of the Welfare State, rise of temporary work, housing bubble and financial crisis, labour market crisis.

Overall, the overall pattern is upgrading and polarisation is only

relevant in economic crisis. If polarisation is associated to small segments and periods. Is it

really so relevant? Should we be more cautious about deus ex machina

explanations?

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2. Methodology

The so-called ‘jobs approach’

Define the jobs: combination of an occupation (2-digit ISCO

category) and a sector of activity (2-digit NACE). Ranking (quintiles): rank the jobs according to earnings (or other

variable proxying job quality) create quintiles taking a year as reference (this is not innocous).

Monitoring the changes: explore the pattern of changes, how they

shape the employment structure and some features behind it.

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2. Methodology

Creation of a job matrix

Sector of activity (2 digits)

Act 1 Act 2 … Act N

Occ

upat

ion

(2 d

igits

)

Occ 1 Job 1 Job 2 … Job N

Occ 2 Job N+1 … … Job 2·N

… … … …

Occ K Job (K-1)·N … … Job K·N

Mean/median wage

An example

10

2. Methodology

An example

11

2. Methodology

An example

12

2. Methodology

An example

13

2. Methodology

Many possible patterns

14

2. Methodology


15

2. Methodology


16

3. Data and periods of interests

o Periods of interest

o Breaks

o Databases

17

-8

-6

-4

-2

0

2

4

6

8

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

% o

f cha

nge

from

the

2nd

quar

ter o

f the

pre

viou

s ye

ar

Annual change of employment in Spain (%, 1978-2013)

Source: Spanish Labour Force Survey.

1977-1985

1985-1991

1991-1994

1994-2008

2008-2011

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1977

1985

Crisis & job destruction

Expansion & job growth

1991

1994

2008

2013


Expansion & job growth


Employment cycles Occupation Activity

National Classification of

Occupations 1979


Occupations 1994 (compatible with

ISCO-88)


Occupations 2011 (inspired by ISCO-

08)


Economic Activities 1974 (equivalent to

NACE)


Economic Activities 1993 (equivalent to

NACE rev. 1 and 1.1)


Economic Activities 2009 (equivalent to NACE rev. 2)

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In sum, taking into account business cycles and breaks, we analyze

o 1977-1985 (job destruction)

o 1985-1991 (job growth)

o 1991-1992 (job destruction + break)


o 1994-2008 (job growth)


o 2011-2013 (job destruction)

Spanish Labour Force Survey

Basic Household Budget Survey

1990-1991

Wage Structure Survey 2006 + Survey of Living Conditions

2006

Wage Structure Survey 2010

Survey of Living Conditions 2009 & 2010

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4. Results

Overall patterns

Modernisation, de-primarisation, de-industrialisation.

The rise and fall of housing.

The rise of the Welfare State.

The polarising effects of crisis.

Other issues worth mentioning.

Overall patterns

21

22 Source: AMECO.

23 Source: Spanish Labour Force Survey.

24

-600

-400

-200

0

Thou

sand

s of

wor

kers

I II III IV V

Absolute change in employment by quintile (1977-1985)

Average change

in employment:

-14.3%

25

-500

050

01,

000

Thou

sand

s of

wor

kers

I II III IV V


Average change

in employment:

+19.1%

26

-100

-50

050

Thou

sand

s of

wor

kers

I II III IV V


-100

-50

050

Thou

sand

s of

wor

kers

I II III IV V


Average change

in employment:

-1.4%

27

-200

-150

-100

-50

0

Thou

sand

s of

wor

kers

I II III IV V


Average change

in employment:

-4.8%

28

050

01,

000

1,50

02,

000

Thou

sand

s of

wor

kers

I II III IV V


Average change

in employment:

+59%

29

-600

-400

-200

0

Thou

sand

s of

wor

kers

I II III IV V


Average change

in employment:

-10.4%

30

-500

-400

-300

-200

-100

0

Thou

sand

s of

wor

kers

I II III IV V


Average change

in employment:

-8.3%

31

Modernisation, de-primarisation, de-industrialisation

32

33 Source: AMECO.

34 Source: AMECO.

35 Source: AMECO.

36

-600

-400

-200

020

0

Thou

sand

s of

wor

kers

I II III IV V

Absolute changes in employment by quintile and sector of activity (1977-1985)

Agriculture, forestry and fishing High-technology industry

Low-technology industry Construction

Knowledge-intensive services Less knowledge-intensive services

Non-manufacturing industries Total

37

-500

050

01,

000

Thou

sand

s of

wor

kers

I II III IV V






38

-150

-100

-50

050

Thou

sand

s of

wor

kers

I II III IV V






39

-500

050

01,

000

1,50

02,

000

Thou

sand

s of

wor

kers

I II III IV V






40

-600

-400

-200

0

Thou

sand

s of

wor

kers

I II III IV V






41

-500

-400

-300

-200

-100

0

Thou

sand

s of

wor

kers

I II III IV V






42 Source: Fernández-Macías (2014).

Correlation between change in employment from 1997 to 2007 and routine and cognitive indices.

The rise of the Welfare State

43

44

-500

050

01,

000

Thou

sand

s of

wor

kers

I II III IV V

Absolute changes in employment by quintile and professional situation (1985-1991)

Private employees Public employees Employers

Self-employed workers Total

45

-100

-50

050

Thou

sand

s of

wor

kers

I II III IV V

Absolute changes in employment by quintile (1991-1992)

Employment in Welfare State services Total

46

-100

-50

050

Thou

sand

s of

wor

kers

I II III IV V




47

050

01,

000

1,50

02,

000

Thou

sand

s of

wor

kers

I II III IV V


Employment in Welfare State services

Total

48

-500

050

01,

000

1,50

02,

000

Thou

sand

s of

wor

kers

I II III IV V




49

-600

-400

-200

020

0

Thou

sand

s of

wor

kers

I II III IV V



50

-500

-400

-300

-200

-100

0

Thou

sand

s of

wor

kers

I II III IV V



51

-600

-400

-200

020

0Th

ousa

nds

of w

orke

rs

I II III IV V




52

4. Discussion

The routine-biased technical change hypothesis presents

limitations to explain the behaviour of the Spanish Labour market

other demand-side forces, labour supply issues (migration),

the intensity of the phenomena, etc.

Shortcomings of the methodology (decreasing returns of scale)

The reference period matters.

The entity of phenomena matters.

The number of quantiles matters.

Job quality is much more than pay.

53

050

01,

000

1,50

02,

000

Thou

sand

s of

wor

kers

I II III IV V


050

01,

000

1,50

02,

000

2,50

0

Thou

sand

s of

wor

kers

I II III IV V


Reference year: 1994 Reference year: 1977

2000 yields something in the middle.

Economy & Finance

JIA Cardiff