Presentation Cardiff

1

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)

2

Contents of the presentation

1. Introduction

2. Methodology

3. Data

4. Results

5. Discussion

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).

7

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?

8

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

Occupation (2 digits)

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

Many possible patterns

15

2. Methodology

Many possible patterns

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

197

81

979

198

01

981

198

21

983

198

41

985

198

61

987

198

81

989

199

01

991

199

21

993

199

41

995

199

61

997

199

81

999

200

02

001

200

22

003

200

42

005

200

62

007

200

82

009

201

02

011

201

22

013

% o

f cha

nge

fro

m t

he 2

ndqu

arte

r of

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

18

1977

1985

Crisis & job destruction

Expansion & job growth

1991

1994

2008

2013

Crisis & job destruction

Expansion & job growth

Crisis & job destruction

Employment cycles Occupation Activity

National Classification of

Occupations 1979

National Classification of

Occupations 1994 (compatible with

ISCO-88)

National Classification of

Occupations 2011 (inspired by ISCO-

08)

National Classification of

Economic Activities 1974 (equivalent to

NACE)

National Classification of

Economic Activities 1993 (equivalent to

NACE rev. 1 and 1.1)

National Classification of

Economic Activities 2009 (equivalent to NACE rev. 2)

19

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 1992-1993 (job destruction + break)

o 1994-2008 (job growth)

o 2008-2010 (job destruction + break)

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

20

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.

21

Overall patterns

22Source: AMECO.

23Source: Spanish Labour Force Survey.

24

-60

0-4

00

-20

00

Tho

usa

nds

of w

orke

rs

I II III IV V

Absolute change in employment by quintile (1977-1985)

Average change

in employment:

-14.3%

25

-50

00

500

1,00

0

Tho

usa

nds

of w

orke

rs

I II III IV V

Absolute change in employment by quintile (1985-1991)

Average change

in employment:

+19.1%

26

-10

0-5

00

50

Tho

usa

nds

of w

orke

rs

I II III IV V

Absolute change in employment by quintile (1991-1992)

-10

0-5

00

50

Tho

usa

nds

of w

orke

rs

I II III IV V

Absolute change in employment by quintile (1991-1992)

Average change

in employment:

-1.4%

27

-20

0-1

50

-10

0-5

00

Tho

usa

nds

of w

orke

rs

I II III IV V

Absolute change in employment by quintile (1992-1993)

Average change

in employment:

-4.8%

28

050

01,

000

1,50

02,

000

Tho

usa

nds

of w

orke

rs

I II III IV V

Absolute change in employment by quintile (1994-2008)

Average change

in employment:

+59%

29

-60

0-4

00

-20

00

Tho

usa

nds

of w

orke

rs

I II III IV V

Absolute change in employment by quintile (2008-2010)

Average change

in employment:

-10.4%

30

-50

0-4

00

-30

0-2

00

-10

00

Tho

usa

nds

of w

orke

rs

I II III IV V

Absolute change in employment by quintile (2011-2013)

Average change

in employment:

-8.3%

31

32

Modernisation, de-primarisation, de-industrialisation

33Source: AMECO.

34Source: AMECO.

35Source: AMECO.

36

-60

0-4

00

-20

00

200

Tho

usa

nds

of w

orke

rs

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

-50

00

500

1,00

0

Tho

usa

nds

of w

orke

rs

I II III IV V

Absolute changes in employment by quintile and sector of activity (1985-1991)

Agriculture, forestry and fishing High-technology industry

Low-technology industry Construction

Knowledge-intensive services Less knowledge-intensive services

Non-manufacturing industries Total

38

-15

0-1

00

-50

050

Tho

usa

nds

of w

orke

rs

I II III IV V

Absolute changes in employment by quintile and sector of activity (1991-1992)

Agriculture, forestry and fishing High-technology industry

Low-technology industry Construction

Knowledge-intensive services Less knowledge-intensive services

Non-manufacturing industries Total

39

-50

00

500

1,00

01,

500

2,00

0

Tho

usa

nds

of w

orke

rs

I II III IV V

Absolute changes in employment by quintile and sector of activity (1994-2008)

Agriculture, forestry and fishing High-technology industry

Low-technology industry Construction

Knowledge-intensive services Less knowledge-intensive services

Non-manufacturing industries Total

40

-60

0-4

00

-20

00

Tho

usa

nds

of w

orke

rs

I II III IV V

Absolute changes in employment by quintile and sector of activity (2008-2010)

Agriculture, forestry and fishing High-technology industry

Low-technology industry Construction

Knowledge-intensive services Less knowledge-intensive services

Non-manufacturing industries Total

41

-50

0-4

00

-30

0-2

00

-10

00

Tho

usa

nds

of w

orke

rs

I II III IV V

Absolute changes in employment by quintile and sector of activity (2011-2013)

Agriculture, forestry and fishing High-technology industry

Low-technology industry Construction

Knowledge-intensive services Less knowledge-intensive services

Non-manufacturing industries Total

42Source: Fernández-Macías (2014).

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

43

The rise of the Welfare State

44

-50

00

500

1,00

0

Tho

usa

nds

of w

orke

rs

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

-10

0-5

00

50

Tho

usa

nds

of w

orke

rs

I II III IV V

Absolute changes in employment by quintile (1991-1992)

Employment in Welfare State services Total

46

-10

0-5

00

50

Tho

usa

nds

of w

orke

rs

I II III IV V

Absolute changes in employment by quintile and professional situation (1991-1992)

Private employees Public employees Employers

Self-employed workers Total

47

050

01,

000

1,50

02,

000

Tho

usa

nds

of w

orke

rs

I II III IV V

Absolute changes in employment by quintile (1994-2008)

Employment in Welfare State services

Total

48

-50

00

500

1,00

01,

500

2,00

0

Tho

usa

nds

of w

orke

rs

I II III IV V

Absolute changes in employment by quintile and professional situation (1994-2008)

Private employees Public employees Employers

Self-employed workers Total

49

-60

0-4

00

-20

00

200

Tho

usa

nds

of w

orke

rs

I II III IV V

Absolute changes in employment by quintile (2008-2010)

Employment in Welfare State services Total

50

-50

0-4

00

-30

0-2

00

-10

00

Tho

usa

nds

of w

orke

rs

I II III IV V

Absolute changes in employment by quintile (2011-2013)

Employment in Welfare State services Total

51

-60

0-4

00

-20

00

200

Tho

usa

nds

of w

orke

rs

I II III IV V

Absolute changes in employment by quintile and professional situation (2008-2010)

Private employees Public employees Employers

Self-employed workers Total

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

Tho

usa

nds

of w

orke

rs

I II III IV V

Absolute change in employment by quintile (1994-2008)

050

01,

000

1,50

02,

000

2,50

0

Tho

usa

nds

of w

orke

rs

I II III IV V

Absolute change in employment by quintile (1994-2008)

Reference year: 1994 Reference year: 1977

2000 yields something in the middle.