Employment, wage and price reactions to the crisis in Spainfirm-level evidence from the wdn survey

Resum

This paper describes the main results from the third wave of the Wage Dynamics Network (WDN) survey. Its main goal is to provide information on demand, fi nance conditions and other factors determining economic activity, on wage, price and employment adjustments over the period 2010-2013, and on fi rms’ perceptions of institutional changes in the labour market. In Spain, the survey was conducted at the end of 2014, collecting information from a representative sample of 1,975 Spanish fi rms covering manufacturing, energy and market services sectors. The main results show that Spanish fi rms’ adjustment to falling demand and other negative conditions since 2010 relied heavily on the dismissal of employees under temporary contracts, although those fi rms most affected by the crisis also signifi cantly reduced permanent employment. On the contrary, wage and hours adjustments remained limited even in those fi rms most severely affected by the negative shocks. Regarding institutional changes, Spanish fi rms perceive some easing in the conditions for economic layoffs, attributing the main source of this higher fl exibility to legal changes since 2010. As to other labour conditions, including wages and hours, the share of fi rms perceiving higher fl exibility is somewhat lower.