This paper explores how the local sectoral composition influences workers' adjustment to a large economic shock. I exploit the massive burst in the Spanish construction sector during the Great Recession, using detailed longitudinal administrative data. The identification strategy relies on regional variations in employment contraction for the construction sector, across Spanish provinces. The construction workers in heavily exposed provinces suffered a significant decline in total earnings between 2007 and 2012, consistent with the workers experiencing long periods of unemployment rather than wage cuts. I find evidence that this short-term labor market adjustment was intersectoral rather than interregional, even under asymmetric exposure. In order to understand the role of sectoral composition in an individual worker's response to the shock, I construct a reallocation index based on worker characteristics and local employment size within the sector. This index captures the degree to which workers from the construction sector can reallocate into other sectors. Then, I examine how sectoral composition contributes to ameliorating the shock's impact. I provide evidence that workers' likelihood of changing sectors depends on having better outside opportunities in other sectors, which varies across provinces and worker's characteristics. Individuals with more evenly distributed characteristics across sectors were less affected by the shock because they were more likely to change sectors. This implies that workers are less likely to adapt to shocks when a region has a high level of sectoral concentration.

A fast-growing literature studies how sorting into particular jobs, firms, or locations affects workers. The key challenge when studying such questions is the non-random sorting of workers into jobs. We propose a novel identification strategy that exploits the timing of worker-firm matching. We isolate quasi-random variation in matches by interacting high-frequency information on the duration of contracts on the labor supply and transitory fluctuations in job creation on the labor demand side. We apply this method to address a central question in dual labor markets: how do different contract types -- fixed-term or open-ended contracts -- affect workers' careers? Using Spanish Social Security records, we track workers since labor market entry and compute their cumulative experience in both contract types. We find that transitory variation in the opening of permanent contracts is highly predictive of individual promotion probabilities, and has long-lasting effects on earnings, employment, and the accumulation of experience in permanent positions.

This paper explores the relationship between job instability and workers' internal migration. In many Eastern European countries, low promotion rates from temporary to permanent positions affect workers' job security, a concern that is magnified for young workers. Due to the uncertainty of migration benefits, which heavily depend on promotions, they may be discouraged from migrating. By using Spanish provinces as a laboratory, this paper examines how job uncertainty affects internal migration within the country. Using detailed administrative longitudinal data, I can observe all worker movements each month. As a result, I can study both short- and long-term migration movements, which provides new evidence on the relationship between job flexibility and migration. According to my results, increasing job flexibility increases short-term immigration while deterring workers from staying longer. One percentage point higher share of fixed-term contracts implies a seven percentage point lower inflow into the province. Finally, by exploring individual-level data, I show job security is an important determinant of a worker's internal mobility.

This article studies the evolution of Spain’s wage inequality between 1995 and 2017, emphasizing differences in trends at cohorts, sectors, and regional levels and using data of Spain’s Continues Sample of Working Histories (MCVL). This dataset allows studying how broad changes in inequality are decomposed at a disaggregated level. The results suggest that wage inequality in Spain is strongly countercyclical. After the Great Recession, the earnings distribution became even more unequal, this is appreciated over all the autonomous communities, especially Andalusia, where the construction sector was relatively more important, in opposition the North of Spain has a higher percentage of the highly educated workers, and less dependent on the construction sector before the crisis. Possible explanations for the documented evolution in earnings inequality are the evolution of the unemployment rate and the development of the college wage premium.