Spain’s labour market reforms are unlikely to lead to economic growth or a drop in unemployment

In early 2012, Spain introduced labour market reforms aimed at boosting competitiveness and economic performance. Bob Hancké looks at recent claims that these reforms have started to boost the Spanish economy, finding that they may have boosted productivity at the expense of weaker companies that have been affected by the crisis. He writes that as long as productivity growth outstrips economic growth, it is unlikely that unemployment will fall.