Economic Modelling

A por la cuarta (como en las sevillanas …)

No podrán con nosotros, los Jartibles de Chu

Dear Carlos, 

Thank you for your email. I do not doubt the technical quality of your paper. If this journal
were Statistical Modelling, I would definitely be happy to accept your paper. However, the
current version of your paper is not suitable for a general economics journal like Economic
Modelling. 

I offered you a reject/resubmit, which has the advantage of giving you more time to think
about what you want to do with this paper. Also, it has the advantage of allowing you to try
other statistics journals before deciding whether you want to undertake the major revision
that is required for this journal. 

If you are ready to revise your paper for Economic Modelling, I would be available to
convert the reject/resubmit to a revise/resubmit. However, I need to emphasize that you
must rewrite your paper in such a way that appeals to a general reader in economics. That
means you need to sharpen your title/highlights, rewrite your abstract/introduction and
discuss related economics papers (perhaps those on the Spanish labor market). 

Es decir (Editor), nos encarga:

You must rewrite your paper in such a way that appeals to a general reader in economics:
- You need to sharpen your Title / Highlights
- Rewrite your Abstract / Introduction
- Discuss related economics papers (perhaps those on the Spanish labor market). 

Carlos:

In highly segmented labor markets, if we cross many variables, or not so many variables but
with many categories some of them, the contingency tables of labor matching face the
problems of zero frequency or very low frequencies in many cells, which supposes a major
drawback, from a statistical and economic/labor point of view. This happens even having
good/large databases, as it is the case in our contribution (Spanish CSWL –Continuous
Sample of Working Lives–).

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 Cuña Carlos con References

The Spanish economy has a very problematic labor market, which presents a relatively high
and persistent unemployment (García-Cintado et al., 2014). Besides, there are persistent
unemployment differentials among regions (López-Bazo and Motellón, 2013). Spain
presents a highly segmented labor market. An important segmentation of that market is in
terms of the insider-outsider approach (dual labor market) (Davia and Hernanz, 2004,
Bentolila et al., 2012), distinguishing between permanent and temporary/unemployed
workers, although there is also evidence of other types of segmentation (native versus
immigrant workers, gender segregation, etc.). It is also a market characterized by different
types of mismatch, for instance in terms of skills, formation, occupation and geographically.
As an example, we can highlight the overqualification/overeducation problem (Nieto and
Ramos, 2017). All these elements have a reflection in the Spanish Beveridge curve and
matching function. The rigid regional wages and the low geographical mobility are also well
documented (Jimeno and Bentolila, 1998, Liu, 2018). In our study we concentrate on the
geographical and occupational perspective. Our revised information can help labor
intermediaries to design policies to reduce the formation, occupation and geographical
mismatch. This is especially important given that a high proportion of the Spanish
unemployment is of the long-term type (Bentolila et al., 2017). In Spain, despite the
problem of high and persistent unemployment, and the associated problem of long-term
unemployment, there is a relatively low spending in ALMPs as well as an insufficient
evaluation of its effectiveness (Arranz et al., 2013). For instance, only specific formation
programs have demonstrated its usefulness. The majority of the resources is targeted to
employment incentives, with high deadweight effect, whereas there is a scarce role of the
public employment agencies as intermediary. Consequently, there is a need for better advice
or tutoring for the unemployed in terms of useful formation as well as occupational and
geographical mobility. At this respect, many researchers claim for using more disaggregated
data and region-specific policies of employment (Bande et al., 2019, Suárez et al., 2019).
There are also proposals of organizing the labor policies by means of geographical
analytical units instead of administrative ones. For instance, we know that living in large
cities or close to metropolitan areas, or having commuting possibilities, increases the
probability of being employed (Viñuela et al., 2014). In this sense, our methodology can be
very useful, given that we are able to detect local labor markets as well as labor relations
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that are not easily observed. Our “labor maps”, with revised highly disaggregated
information on matching, can be very necessary for the design of a sharp and efficient
policy. Another utility of our methodology can be in the area of the reduction of congestion
externalities –according to Gautier (2002), the congestion externality can be reduced by
institutions which specialize in screening large groups of workers. Moreover, most of the
labor markets of other countries are also segmented, from different perspectives (Eurofound,
2019), so our methodology could be also very useful for those cases.

New References:

Arranz, J.M., García-Serrano, C. and Hernanz, V. (2013). Active labour market policies in
Spain: A macroeconomic evaluation, International Labour Review, 152 (2), 327-348.

Bande, R., Karanassou, M. and Sala, H. (2019). Employment in Spanish regions: Cost-
control or growth-enhancing policies? The Annals of Regional Science, 62 (3), 601-635.

Bentolila, S., Dolado, J.J. and Jimeno, J.F. (2012). Reforming an insider-outsider labor
market: The Spanish experience, IZA Journal of European Labor Studies, 1, n. 4.

Bentolila, S., García-Pérez, J.I. and Jansen, M. (2017). Are the Spanish long-term
unemployed unemployable? SERIEs (Journal of the Spanish Economic Association), 8 (1),
1-41.

Davia, M.A. and Hernanz, V. (2004). Temporary employment and segmentation in the
Spanish labour market: An empirical analysis through the study of wage differentials,
Spanish Economic Review, 6 (4), 291-318.

Eurofound (2019). Labour market segmentation: Piloting new empirical and policy
analyses, Publications Office of the European Union, Luxembourg.

García-Cintado, A., Romero-Ávila, D. y Usabiaga, C. (2014). Spanish Regional

Unemployment. Disentangling the Sources of Hysteresis, Springer, Berlin.

Jimeno, J.F. and Bentolila, S. (1998). Regional unemployment persistence (Spain, 1976-
1994), Labour Economics, 5 (1), 25-51.

Liu, L.Q. (2018). Regional Labor Mobility in Spain, IMF, Working Paper WP/18/282.

López-Bazo, E. and Motellón, E. (2013). The regional distribution of unemployment: What

do micro-data tell us? Papers in Regional Science, 92 (2), 383-406.

Nieto, S. and Ramos, R. (2017). Overeducation, skills and wage penalty: Evidence for Spain
using PIAAC data, Social Indicators Research, 134 (1), 219-236.

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Suárez, P., Mayor, M., Cueto, B. and Salas‐Olmedo, M.H. (2019): The spatial structure of
the labour market across public jobcentres. Does their accessibility matter? Papers in
Regional Science, 98 (3), 1359-1372.

Viñuela, A., Rubiera-Morollón, F. and Fernández-Vázquez, E. (2014). Applying economic-

based analytical regions: A study of the spatial distribution of employment in Spain, The
Annals of Regional Science, 52 (1), 87-102.

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Nota: la principal segmentación en el mercado trabajo español es la insider-outsider

(indefinidos/temporales+parados), pero no tiene mucho que ver con nuestra perspectiva
analítica (de eso conozco muchos trabajos).

Nota: Fer: me ha venido a la mente lo que decíamos en CSDA de que las ocupaciones se
unían antes que las provincias en el clustering.

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Aquí abajo están algunos trabajos que ha buscado Carlos (tengo todos los pdfs), por si
queréis que amplíe o cambie algo (hay cosas interesantes)

Algunos trabajos revisados (Carlos):

Arranz, J.M., García-Serrano, C. and Hernanz, V. (2013). Active labour market policies in
Spain: A macroeconomic evaluation, International Labour Review, 152 (2), 327-348. (he
metido algunas cuñitas en el texto de arriba)

Sobre la evaluación de las ALMPs.

Badillo-Amador, L., García-Sánchez, A. and Vila, L.E. (2005). Mismatches in the Spanish
labor market: Education vs. competence match, International Advances in Economic
Research, 11, 93-109.

El mismatch en competencias difiere del mismatch educativo.

Dice Pablo que contiene tablas de contingencia.

Bande, R. and Karanassou, M. (2009). Labour market flexibility and regional

unemployment rate dynamics: Spain 1980-1995, Papers in Regional Science, 88 (1), 191-
207.

Study of the regional unemployment dynamics.

They pay attention to the different labor market flexibility between high and low
unemployment regions.

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Bande, R., Karanassou, M. and Sala, H. (2019). Employment in Spanish regions: Cost-
control or growth-enhancing policies? The Annals of Regional Science, 62, 601-635.

The paper calls for more region-specific policies of employment.

Baños, J.F., Rodriguez-Alvarez, A. and Suarez-Cano, P. (2019). The efficiency of public

employment services: A matching frontiers approach, Applied Economic Analysis, 27 (81),
169-183.

Estudian la efficiency of the public employment services (sus factores determinantes).

Bentolila, S., García-Pérez, J.I. and Jansen, M. (2017). Are the Spanish long-term
unemployed unemployable? SERIEs, 8, 1–41.

Se preguntan: Are the Spanish long-term unemployed unemployable?

“We argue that active labor market policies should play a more prominent role in the fight
against long-term unemployment while early activation should be used to curb inflows.”

Caparrós, A. (2016). Wage growth and occupational mobility in Spain: Movers vs stayers,
International Journal of Social Economics, 43 (12), 1481-1506.

Sobre occupational mobility.

Effect on wage growth.

Cueto, B. and Suárez, P. (2014). A review of active and passive labour market policies in
Spain, MPRA Paper No. 60648.

Un Survey.

“The majority of the resources is targeted to employment incentives, despite their high
deadweight effect given their characteristics. Data also show the scarce role of PES as
intermediary.”

Eurofound (2019). Labour market segmentation: Piloting new empirical and policy
analyses, Publications Office of the European Union, Luxembourg.

Informe sobre segmentación laboral (dual labor market), segmentación no de la nuestra,

estudia varios países, incluyendo España.

Fonseca, R. and Muñoz, R. (2003). Can the matching model account for Spanish
unemployment? Investigaciones Económicas, 27 (2), 277-308.

Coordination failures in the matching process between vacancies and the unemployed /
Estudian la Beveridge curve.

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Davia, M.A. and Hernanz, V. (2004). Temporary employment and segmentation in the
Spanish labour market: An empirical analysis through the study of wage differentials,
Spanish Economic Review, 6, 291-318.

Trabajadores temporales.

Segmentación.

Estudio de los wage differentials.

Wage differentials between temporary and permanent workers are explained by the
differences in the distribution of personal and job characteristics in both groups, but not by
differences in the rewards for those characteristics.

Díaz Dapena, A., Fernández Vázquez, E. and Rubiera Morollón, F. (2018). Labor Density
and Wages in Spain: Evidence from Geographically Disaggregated Data, Growth and
Change, 49 (1), 55-70.

Análisis del mercado de trabajo desagregado geográficamente (labor density and wages).

Gałecka-Burdziak, E. (2016). Aggregate matching in Spain. Time series analysis using

cointegration techniques, Contemporary Economics, 10 (1), 5-12.

“I narrow the considerations to a job queuing model, which is the most relevant description
of the labor market matching process in Spain.”

“These findings confirm that job seekers find themselves on the disadvantaged side of the
market and compete for scarce job offers.”

De una seguidora nuestra … Ewa.

García, J.R. and Sorolla, V. (2017). Frictional and non-frictional unemployment in a labor
market with matching frictions, The Manchester School, 85 (4), 450-465.

The US frictional unemployment rate is around 36 per cent of total unemployment, whereas
for Spain, approximately 20 per cent of all unemployment is due to frictions. This outcome
may be explained by the fact that Spain is a country with more labor market rigidities than
the US.

España poco desempleo friccional.

González Morales, M.O., Díaz Pérez, F.M. and Álvarez González, J.A. (2012). Education
and Employment (2005-2009): A Comparative Analysis Between the Spanish and Foreign
Working Population, Chinese Business Review, 11 (4), 411-423.

Analyze the relationship between educational level, employment and economic

activity, in the Spanish and foreign working population in the Spanish labour market
and the impact of the economic crisis (de 2008).

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The results show significant differences between both groups.
Liu, L.Q. (2018). Regional Labor Mobility in Spain, IMF, Working Paper WP/18/282.

Estudia la low regional mobility in Spain.

Policies that facilitate wage setting flexibility and reduce labor market duality could help
enhance the functioning of the labor market, thereby promoting labor mobility. There may
be also room for policies to incentivize people to move and provide support through
targeted active labor market policies.

López-Bazo, E. and Motellón, E. (2013). The regional distribution of unemployment: What

do micro-data tell us? Papers in Regional Science, 92 (2), 383-406.

Regional disparities in unemployment rates are large and persistent (Spain).

They distinguish between the contribution of differences in the regional distribution of

individual characteristics from that attributable to a different impact of these characteristics.

López-Bazo, E., Del Barrio, T. and Artis, M. (2002). The regional distribution of Spanish
unemployment: A spatial analysis, Papers in Regional. Science, 81, 365-389.

Análisis de la distribución del desempleo y sus factores determinantes.

Nieto, S. and Ramos, R. 2017. Overeducation, skills and wage penalty: Evidence for Spain
using PIAAC data, Social Indicators Research, 134, 219–236.

Spain is one of the developed countries supporting the highest overeducation rates.

Part of the wage penalty of overeducated workers is due to their lower skill level.

Obiols-Homs, F. and Sanchez-Marcos, V. (2018). Education, Occupation-Mismatch and

Unemployment, Barcelona GSE Working Paper Series, Working Paper nº 807.

Relation of education and occupation mismatch.

“Had the quality of education observed in Spain been similar to the European average then
the mismatch would have been between 5 and 10 percentage points lower, the
unemployment rate of the two types of workers (educated and non educated) would be
reduced by 40%, but the tertiary education wage premium would be slightly smaller than in
the benchmark economy.”

En resumen: Better education, lower occupation mismatch.

Murillo Huertas, I.P., Ramos, R. and Simón, H. (2020). Revisiting interregional wage
differentials: New evidence from Spain with matched employer-employee data, Journal of
Regional Science, 60, 296-347.
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Persistent regional wage differentials (incluso controlando por características individuales y
de la empresa)

Matched employer-employee microdata.

Although part of the raw regional wage differences observed is explained by differences
between regions in productive structures, and, to a much lesser extent, in labor forces,
noteworthy, very similar throughout the wage distribution regional differences net of
composition effects arise even after controlling for a broad set of individual and firm
characteristics.

Poggi, A. (2019). Regional labour markets in Spain: Can flexibility and local democracy
reduce inefficiencies? Papers in Regional Science, 98, 1499-1516.

Analysis of regional inefficiencies of job creation in Spain.

Stochastic production frontier approach.

To test whether a more flexible labour market as designed by the 2010 reform reduces
regional inefficiencies. Results suggest that the 2010 reform appears to have improved on
average the efficiency of the Spanish labour market.

The paper also investigates the importance of local democracy for the labour market,
finding that local democracy positively influences regional efficiency.

Polavieja, J.G. (2005). Flexibility or polarization? Temporary employment and job tasks in
Spain, Socio-Economic Review, 3, 233-258.

Habla de segmentación debida al uso del empleo temporal (estudiando los job tasks).

Puente, S. and Casado, A. (2016). Skills mismatch between labour supply and demand in
Spain, Economic Bulletin, Bank of Spain, September, 35-44.

Studies the skill mismatch.

They use an employability index.

According to this index, the group showing the least mismatch in skills would be that of the
unemployed with a low educational level, since there is a greater correlation between the
tasks performed over their previous working career and what is currently demanded.
Consequently, this group’s employability problems might be attributed, above all, to low
demand for relatively unskilled labour. This mismatch is greater among individuals with
intermediate and high educational levels, given that the skills the unemployed acquired in
their last jobs are less similar to those current job-holders use.

Call for active policies: the relative need for training in specific skills.

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The availability of regular data on both the map of skills and on the characteristics of the
training courses comprising these active policies would be required.

Ramos, R. and Sanromá, E. (2012). Overeducation and local labour markets in Spain,
Tijdschrift voor Economische en Sociale Geografie / Journal of Economics and Social
Geography, 104 (3), 278-291.

Studies the influence of individual variables and some spatial mobility characteristics (sizes
of local labour markets, possibility of commuting, etc.) of regional labour markets on
overeducation in Spain.

Sizes of local labour markets and possibility of commuting are relevant factors in explaining
overeducation.

Sala, H. and Trivín. P. (2014): Labour market dynamics in Spanish regions: Evaluating
asymmetries in troublesome times, SERIEs, 5, 197-221.

Labour market dynamics in Spanish regions.

Asimetrías según el ciclo.

También hacen un análisis cluster de regiones con alto y bajo desempleo.

Sebastian, R. (2018). Explaining job polarisation in Spain from a task perspective, SERIEs,
9 (2), 215-248.

Occupational mobility.

Job polarization (expansion at the lower and upper tail of the employment distribution).

Task perspective.

Simón, H., Ramos, R. and Sanromá, E. (2014). Immigrant Occupational Mobility:

Longitudinal Evidence from Spain, European Journal of Population, 30 (2), 223-255.

Immigrant occupational mobility.

Comparan occupation in home and host countries.

Su situación empeora en España. (segmented assimilation theory)

Suárez, P., Cueto, B. and Mayor, M. (2014). Effects of public employment services on labor
transitions: An analysis for the Spanish case, International Journal of Manpower, 35 (7),
996-1015.

Evaluate the influence of public employment services (PES) on transitions from

unemployment.

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The contribution of PES to improving labor market outcomes is low in the case of
transitions to employment. Nevertheless, PES play an important role in workforce dropout
prevention.

Suárez, P., Mayor, M. and Cueto, B. (2012). The accessibility to employment offices in the
Spanish labour market, Papers in Regional Science, 91 (4), 823-849.

Study of the accessibility to employment offices.

Higher accessibility, lower unemployment.

Hablan de local labour markets.

Suárez, P., Mayor, M., Cueto, B. and Salas‐Olmedo, M.H. (2019): The spatial structure of
the labour market across public jobcentres. Does their accessibility matter? Papers in
Regional Science, 98, 1359-1372.

The econometric results confirm the hypothesis that there is a strong residence effect that is
not sufficiently mitigated by public employment services.

Viñuela, A., Rubiera-Morollón, F. and Fernández-Vázquez, E. (2014). Applying economic-

based analytical regions: A study of the spatial distribution of employment in Spain, Annals
of Regional Science, 52, 87-102.

Administrative rather than analytical regions have been used to study employment.

Living in large cities or close to metropolitan areas increases the possibilities of being
employed.

The need for more highly disaggregated data at spatial level in order to overcome the
limitations inherent to empirical analysis based on administrative regions.

Viñuela-Jiménez, A., Rubiera-Morollón, F. and Cueto, B. (2010). An Analysis of Urban

Size and Territorial Location Effects on Employment Probabilities: The Spanish Case,
Growth and Change, 41 (4), 495–519.

They analyze the relevance of urban size and the position of each territory (in terms of its
distance from large metropolises) for the probability of being employed in the Spanish
economy.

Both factors (mayor tamaño y cercanía a las metrópolis) increase the probability of being
employed.

----

Carlos

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In those cases, our methodological proposal allows to correct the original contingency table
on labor matching, which has statistical advantages and also provides a much better
view/information of the real functioning of the labor market.

Summing up, our proposal allows correcting the original sparse contingency table, offering
a better perspective of the labor matching process.

For instance, we can detect labor relations that are difficult to find just observing the reality
or with the information from the raw data, before being processed. Alternatively, we can
revise relations that are over-represented in the original sample/contingency table.

This revised information is very useful in order to design sharp active labor market policies.
We show, with precision, the propensity to match or combine of the variables/categories
involved in our analysis. In that sense, we have considered in our application two relevant
labor variables: location (province) and group of occupation.

Apart from a methodological proposal we provide a relevant example of its usefulness,

applying it to a very segmented (and problematic) labor market, which highly needs
effective active policies (for instance, in order to reduce the high figures of long-term and
youth unemployment). We clearly show that the overall labor information improves a lot
after our proposed correction, which is very useful for effective policymaking (for instance,
in terms of providing accurate advice on geographical and occupational mobility).

Furthermore, our methodology can be applied fruitfully to many types of relevant economic
relations characterized by the crossing of variables/categories with high segmentation.

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Qué relaciones económicas destacamos aquí?

Aquí estarían los trabajos que debe buscar Pablo (unos pocos)

En la búsqueda a ver si podemos poner algún otro trabajo de Economic Modelling (les gusta
a las revistas autocitarse).

Títulos de mis otros dos trabajos en Economic Modelling:

Álvarez de Toledo, P., Núñez, F. y Usabiaga, C. (2014): “An Empirical Approach on

Labour Segmentation. Applications with Individual Duration Data”, Economic Modelling,
36, pp. 252-267.

García-Cintado, A.C., Romero-Ávila, D. y Usabiaga, C. (2015): “Can the Hysteresis

Hypothesis in Spanish Regional Unemployment Be Beaten? New Evidence from Unit Root
Tests with Breaks”, Economic Modelling, 47, pp. 244-252.

Estructura del título: primero algo económico, segundo algo econométrico

Ejemplo de título now:

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 Matching in Segmented Labor Markets and Contingency Tables: An Analytical Proposal.

(Pablo, no se debe/puede ser demasiado específico, y debe tener “olor” económico)

Please let me know which option you prefer. Thank you again for your continued
contribution to this journal. 

Best regards,

Angus

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