Florencia Jaccoud, Fabien Petit, Tommaso Ciarli (p)

Wladimir Cerda

This paper investigates labor market adjustments to three key automation technologies—robots, information and communication technology (ICT), and software and database--across 217 regions in 20 European countries from 1995 to 2017. By clustering regions based on their structural characteristics and developing a measure of regional exposure to these technologies, we analyze how automation influences regional employment and wages.
Our findings emphasize the critical role of regional differences in shaping the impact of automation. First, robots are found to have a positive effect on employment, but only in high-productivity core regions. In contrast, ICT and software and database have a more significant impact on low-productivity, industry-intensive regions. We argue that this pattern reflects the later adoption of these technologies in lagging areas, highlighting the uneven pace of technological diffusion across regions.

Wladimir Cerda (p), Manuel Pérez

Celia Melguizo

The recent functional and spatial fragmentation of extractive industries presents significant challenges to local economies with a strong mining specialization. Increasing long distance commuter flows (LDC) and the rise of outsourcing as strategies for labor mobility and flexibility in Chile may affect the equilibrium of host labor markets. This paper quantifies the impact of LDCs, heavily concentrated in outsourced employment, on wage dynamics and labor demand in these markets.

First, we develop a general equilibrium model that accommodates the coexistence of contracted and outsourced employment, distinguishing between native and commuting workers using nested CES functions. The model is calibrated using annual aggregate wage and employment data from the Chilean regional labor markets between 2010 and 2022.

To address the potential endogeneity bias arising from the endogenous location of long distance commuters, we employ an instrumental variable that combines the historical productive specialization of regional markets with an exogenous commodity price shock, which has driven mining activity and increased the supply of commuters.

Our findings indicate that native and commuter workers are perfect substitutes in production, which implies that native wage dynamics depends solely on relative changes in the supply of outsourced labor. Consequently, we demonstrate that wage declines induced by increases in LDCs are concentrated in outsourced employment.


Second, based on algebraic derivations from the model, we obtain our own and cross-labor-demand elasticities, enabling us to quantify how relative labor demand shifts in favor of outsourcing within host economies.

Finally, we simulate a counterfactual scenario in which the mobility of long-distance commuters is restricted, mitigating both wage declines and the rise in outsourced labor demand in those regional labor markets with a strong productive specialization in extractive activities.

Celia Melguizo (p), Omar Blanco-Arroyo

Ivana Kulhánová

Labour market concentration has recently drawn significant attention from scholars and policymakers, as it is considered the major source of monopsony power— scenario wherein firms wield authority in setting wages and leverage this power to establish wages and employment at levels beneath those found in a competitive market. Numerous studies have measured labour market concentration across different regions, occupations, and industries in the U.S. and Europe, revealing its significant impact on wages, inequality, employment, and job security. This study examines the relationship between labour market concentration and job security in Spain, with a particular focus on how the 2021 labour reform influenced this dynamic. Spain provides an interesting case, as its dual labour market has historically exhibited one of the highest rates of temporary employment within both the European Union and the OECD. However, the 2021 labour reform, one of the most ambitious in recent history, has played a crucial role in reducing temporary employment. To conduct our analysis, we exploit the microdata from the Universe of Contracts of the Spanish Public Employment Service (Servicio Público de Empleo Estatal, SEPE), a comprehensive dataset containing detailed information on employers, workplaces, contracts, and employees. Our preliminary logistic regression results point out a positive and significant relationship between labour market concentration and temporary employment, suggesting that higher concentration correlates with greater job insecurity. Importantly, our findings also reveal that the 2021 reform has mitigated this effect, reducing the impact of concentration on temporary employment.

Ivana Kulhánová (p), Michala Lustigová, Viktor Květoň

Ángel Martín-Román

The COVID-19 pandemic significantly affected labor markets across European countries, with its effects disproportionately distributed among socioeconomic groups and regions. This study investigates the economic consequences of pandemic-related measures in selected European countries using data from the 10th round of the European Social Survey. This data was collected between 2020 and 2022 in European countries. Countries were selected for analysis with special attention to various economic restrictions set by the government as a response to the COVID-19 pandemic to avoid further spread of this disease. For instance, in Italy and Czechia, the government trusted in strict lockdowns. In contrast, in Sweden, lighter restrictions were adopted. These differences in the effort to tackle the COVID-19 pandemic resulted, from the economic point of view, in various labor market outcomes in European countries. From the European perspective, the situation on the labor market was particularly severe in Greece and Czechia, with 42.2% respectively 39.1% of employed individuals experiencing at least one negative labor market event (job loss, income reduction, working hours reduction, furlough, and forced unpaid leave) – one of the highest rates in Europe. The most affected groups were those with secondary education and employees in the private sector. On the contrary, Sweden with lighter governmental restrictions showed lower rates (20.4%) of negative labor market events among employed individuals. In terms of economic sectors, services, tourism, and retail sectors were disproportionately affected, particularly in Italy and Czechia. In countries like Sweden and the Netherlands, with stronger digital economies, people adapted more effectively to remote work. The analysis also confirms substantial gender differences. Women across all countries faced higher risks of income reduction and of forced unpaid leave, whereas men were more exposed to job losses. These patterns reflect not only sectoral employment differences but also entrenched gender roles, particularly related to caregiving. The COVID-19 pandemic underscored the need for resilient labor market policies to mitigate social and economic inequalities. The findings emphasize the need for addressing gender disparities, enhancing social protection, investing in education and digital transformation, and supporting vulnerable groups in society.

Javier Martín-Román (p), Ángel Martín-Román (p)

Tommaso Ciarli

This paper evaluates the impact of income support benefits on aggregate labor supply, focusing on the Agrarian Unemployment Benefit (AUB) implemented in Andalucía, Spain. Using a quasi-experimental design, the Synthetic Control Method (SCM), we compare the labor force participation rate of Andalucía with a synthetic counterpart. The results indicate that the AUB increased the participation rate by approximately 2 percentage points during the initial years after implementation. However, this rise did not surpass the number of AUB recipients, suggesting partial offsetting effects. The analysis identifies both encouraging and discouraging labor supply responses, highlighting the role of monitoring mechanisms and the macroeconomic environment. This research contributes to the literature by providing a macroeconomic perspective on income support policies, exploring theoretical channels of labor supply decisions, and applying SCM as an innovative tool in this context. The findings have implications for the design of similar policies in regions with structural unemployment.