Research
Publications
Do Temporary Help Agencies Help? Employment Transitions for Low-Skilled Workers (joint with Belén Jerez, and Raquel Carrasco)
Labour Economics, Volume 90, October 2024
We examine the effects of working for a Temporary Help Agency (THA) on transition rates for low-skilled temps to alternative states, using Spanish administrative data. Our analysis, based on the estimation of competing risk discrete-time duration models with multiple spells, reveals the importance of accounting for short-duration dependence. We find that a transition to unemployment or a (new) THA contract is more likely for agency workers than for direct-hire temps at all durations. The same holds for transitions to permanent contracts, though these are infrequent in our sample. The latter marginal effect of THA employment is procyclical. In contrast, the former effects increased during the Great Recession and are still high, which suggests that their increase in recent years is more structural than cyclical. When we control for worker unobserved heterogeneity, the marginal effect of agency contracts on the likelihood of entering unemployment increases and the effect on the THA reemployment probability falls. This suggests that the high persistence of THA employment is partially due to unobserved characteristics of agency workers, whereas their higher unemployment risk may be mainly due to the nature of their jobs.
Immigration and Labour Market Flows (joint with Andri Chassamboulli, Idriss Fontaine and Pedro Gomes)
Labour Economics, Volume 86, January 2024
We document facts about the labour-market transition rates of immigrants and natives in France, Spain and the US, for the period between 2003 and 2018. We find large differences in how immigrants’ labour-market transitions compare to those of natives across the three countries. Native-immigrant gaps in transition rates are not equal across nationalities of immigrants within each county, and cannot be explained by compositional differences in terms of observable characteristics such as education, age, sector or occupation. Our results point to other factors, such as human capital transferability, discrimination, type of migration and language proficiency as being more important determinants of immigrants’ labour market performance. Despite the differences across the three countries, using a VAR model we find a common stylized fact: inflows of foreign workers have a weak and mostly non-significant effect on the job-finding and job-separation rates of natives.
The Cyclicality of Immigrant Wages and Labour Market Flows: Evidence from Spain
Economics, Volume 16, No. 1, January 2022
This article studies the responses of real wages and labour market flows of immigrants in Spain for the period between 1999 and 2019. By using Labour Force Survey microdata, I examine the cyclicality of job-finding and job-separation rates for immigrants and natives over the long Spanish economic expansion and the sharp contraction. During the expansion, 1999–2007, the job-finding rate was higher for immigrants than for natives, but both rates converged to a lower level after the Great Recession took place in 2008. I also find that the impact of the crisis on the job-separation rate was more than three times as high for immigrants than for natives. By using longitudinal social security data, I find that wage cyclicality is higher for immigrants than for natives: a one percentage point increase in the unemployment rate is associated with a 0.61 and 0.85% drop in real wages for natives and immigrants, respectively. However, these differences only occur among low-tenure workers. This study provides novel empirical evidence to enrich macroeconomic theories on the interaction of economic cycles and the impact of immigration
Undocumented Migration and Electoral Support: Evidence from Spain (with José L. Groizard)
Politics and Governance, Volume 9, No. 4, October 2021
Unwrapping the political discourse against immigration is key to understanding the rise of populism in Western democracies. A growing body of literature has found ample evidence that immigration pays a premium to conservative political forces that propose tighter policies. Using data on presidential elections in Spain from 2008 to 2019, we shed light on this debate by highlighting the role played by irregular migration. Some studies show that undocumented immigrants consume less and earn lower wages than documented immigrants with similar observable characteristics. In addition, since they are relegated to working in the informal sector, they cannot contribute to the welfare state with direct taxes. This suggests that undocumented migration might intensify support for right-wing politics and that the effect is independent from the one caused by the presence of documented migrants. We apply an instrumental variable strategy to deal with the non-random distribution of migrants across political districts. Our findings indicate that increasing undocumented migration increases support for the right, while increasing documented migration rises support for the left. When we consider the irruption of the far-right into electoral competitions, we find that undocumented migration redistributes votes from the left to the right, as has been observed in other countries.
Labour Market Flows: Accounting for the Public Sector (joint with Idriss Fontaine, Pedro Gomes and Diego Vila-Martin)
Labour Economics, Volume 62, January 2020
For the period between 2003 and 2015, we document a number of facts about worker gross flows in France, the United Kingdom, Spain and the United States, focussing on the role of the public sector. Using the French, Spanish and UK Labour Force Survey and the US Current Population Survey data, we examine the size and cyclicality of the flows and transition probabilities between private and public employment, unemployment and inactivity. We examine the stocks and flows by gender, age and education. We decompose contributions of private and public job-finding and job-separation rates to fluctuations in the unemployment rate. Public-sector employment contributes 20 percent to fluctuations in the unemployment rate in France and UK but only 10 percent in Spain and United States. Private-sector workers would forgo 0.6 to 2.9 percent of their wage to have the same job security as public-sector workers.
Working Papers
Being young in Spain and the scars from recessions (joint with Andrés Erosa, and Matthias Kredler) (R&R at The Econimic Journal)
Evidence from Spanish administrative data suggests that the Great Recession may have had long-lasting effects on employment and wages, with heterogeneous impacts across different demographic groups. To assess the long-run effects of recessions on workers' careers, we develop a model of cyclical fluctuations in the labor market. Young workers in the model are more likely to be employed under temporary contracts than older workers, increasing their likelihood of facing a job separation when a recession hits. Low job-finding rates during recessions imply that displaced workers will likely face a long period of unemployment and lower skill accumulation, feeding into worse future labor market outcomes. Our results imply that high-school graduates entering the economy at the start of the GR suffered the highest lifetime earnings losses of about 82 thousand euros. High-school dropouts and college graduates experienced losses of about 42 and 47 thousand euros. The interaction between skill accumulation and the dual labor market drives the long-lasting effects of recessions, particularly for young workers entering the economy when a recession starts.
The Role of Immigration in a Deep Recession (forthcoming at European Economic Review)
This paper studies the impact of pre-Great Recession immigrant inflows on the labour market during a recession. It develops a random search model of the labour market featuring vacancy persistence, endogenous return migration, and wage rigidity. Consistent with the Spanish data, some immigrants in the model leave the country during the recession, freeing up jobs for natives. Yet, differences in match-quality draws between immigrants and natives also impact firms' job creation decisions. The return-migration channel positively affects natives, while job creation effects are negative in the calibrated Spanish economy. I find that immigrants mitigate the impact of the recession and enhance natives' welfare. During the recession, the native unemployment rate would have been 2 percentage points higher in the absence of the pre-crisis immigration boom. Return migration plays a key role, with short- and medium-run impacts on the native unemployment rate 6 times larger than all other channels combined.
Sharing my place: the local labor market impact of the P2P technology shock (joint with José L. Groizard and Ferrán Portella-Carbó)
The emergence of new digital business models, often called peer-to-peer (P2P) marketplaces, is transforming the hospitality industry. While its implications go beyond the industry, our knowledge of its aggregate impact is limited. This paper examines the effects of the P2P irruption on the local labor markets in Spain between 2016 and 2020. We exploit exogenous regulatory changes in short-term rentals (STRs) across different municipalities and periods to investigate the employment outcomes and job reallocation patterns in response to the P2P technology shock. Our findings reveal a strong and positive effect of P2P activity on local employment. A 10% increase in P2P overnights leads to an increase in local employment by 8.2 workers and a reduction in unemployment by 7.6 workers. This effect is pronounced across various sectors, including services, construction, and industry, while agriculture experiences an increase in unemployment. Our analysis indicates that the employment gain from P2P STRs varies across municipalities, with smaller non-touristy areas demonstrating the most substantial employment gains. In contrast, areas with intense competition from hotels experience a diminished effect.
Who is moving? Migration responses to regional shocks (joint with Cem Özgüzel)
Geographical mobility of workers can equilibrate differences across labour markets facing asymmetric shocks. However, not everybody moves. This paper examines the heterogeneity in the mobility responses of immigrants and natives to regional economic shocks. Focusing on European countries during 2003-2017, it decomposes the net migration flows into migration inflows and outflows, and explicitly distinguishes between an economic expansion and a recession. We find that immigrants are highly reactive to negative regional shocks. In contrast, natives do not move. The decrease in immigrants’ net-migration rate after a negative shock is explained by the decline in the inflows rather than the increase in the outflows. We also find that the responses of immigrants’ inflows to regional economic shocks are not symmetric over expansions and recessions, as they react more during the latter. Overall, men and low-educated immigrants constitute most of the mobility reactions during the recession. The higher responsiveness of immigrants’ inflows to regional economic shocks highlights the role that they play as an accelerating factor in the adjustment of labour markets during a recession.
Job Instability over the Life-cycle (with Rubén Veiga-Duarte)
Temporary jobs account for a big share of salaried employment in many developed countries. In this paper, we quantify the incidence of temporary jobs for workers late in their labour market career (at mid-career, defined as 30-35 years old). For that, we use Spanish administrative data from the "Continuous Sample of Working Histories'', which allows us to track workers’ entire labour marker history. We find that around 15 per cent of workers spend more than 50 per cent of their mid-career active time in temporary jobs. We also find a high degree of persistence in the time spent as temporary; workers spending most of their young-age (20-30 years old) employed in temporary jobs experience higher job-separation rates and find fewer permanent jobs later in their careers. Spending most of the young-time in temporary jobs is also associated with lower wages (around 10%) in permanent jobs, even at age 40. We then compare workers’ labour market performance at young-age conditional on their time spent as temporary or permanent at mid-career. We find that both groups start their careers with similar job-finding and job-separation rates in permanent jobs, but differences increase as they age. Finally, while mid-career temporary workers have lower wages in permanent jobs than mid-career permanent workers right from the beginning of their career, this gap remains roughly constant over time. This empirical evidence will be used to develop a theory that could help us to disentangle the underlying mechanisms that explain the observed persistence in temporary employment.
The Size, Socio-Economic Composition and Fiscal Implications of the Irregular Immigration in Spain
This paper estimates the total number of irregular immigrants residing in Spain from 2002 to 2019 and studies their nationality, sex, gender, and sectoral composition. Using the residual method and combining microdata sources from the Spanish Labour Force Survey and Social Security registers I find that by the end of 2019, there were around 390,000-470,000 irregular immigrants in Spain, which account for 11-13% of the total non-EU immigrants. Irregular immigrants are younger than the regular ones, they are predominantly from South and Central America and they are concentrated in the accommodation and food activities and the activities household sector. Using the most updated wave of the EU-SILC data for Spain, I find a positive direct fiscal impact of non-EU immigration. This impact is 75% higher than for the natives' households, mainly explained by their younger age structure. Once education and health public systems are taken into account, the fiscal impact gap between the two types of households vanishes. I also find large fiscal costs associated with maintaining the irregularity status. Last, my estimates suggest that the potential positive gains from legalising the current irregular immigrants are around 3,300 euros yearly for a regularized worker.