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Abstract
Spain has experienced a history of chronically high and intractable unemployment. The Job Guarantee has been theorized as a policy proposal that aims to produce tight full employment and enhances macroeconomic and price stability. This paper provides an overview of some of the explanations to the causes of unemployment and the performance of traditional active labor management policies. A simulation of a job guarantee programme for the historic 1999–2019 period is provided using an econometric model of the Spanish economy. In addition to eradicating unemployment, we find that the job guarantee programme attenuates the economic cycle, sustains higher real incomes, and does not compromise price stability.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
1 For simplicity reasons, the model does not distinguish between gross and net -of social contributions- wages; in other words, it is assumed that JG participants do not suffer any discount in their paychecks.
Additional information
Notes on contributors
Agustín Mario
Agustín Mario is at National University of Moreno, Moreno, Argentina
Stuart Medina Miltimore
Stuart Medina Miltimore is at Red MMT Spain, Madrid, Spain
Esteban Cruz Hidalgo
Esteban Cruz Hidalgo is at University of Extremadura, Cáceres, Spain