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Isabel Rodríguez Tejedo, School of Economics and Business Administration, University of Navarra, Spain.

How to create work

Wed, 22 Jun 2011 15:27:38 +0000 Published in La Razón (Madrid)

Why don't the autonomous regions make their accounts public on a regular basis?
-Information is expensive, both in administrative and political terms. If it could be avoided, no one is accountable. But that would only be a partial and unfair answer. If for no other reason than practical considerations, creating the culture and capacity for consistent reporting takes time and effort.

-Should a ceiling of expense be imposed on them, like the one that already existed in Spain, to tackle the deficit?
-Budgetary control measures can work, but only if they are carefully designed. It is temptingly dangerous to think that we can design a rule, aimed at a clear goal , to tackle fiscal problems. There are many examples: ceilings on expense that do not contain it, debt limits that coexist with debt growth... If a limit is imposed on expense, it seems unlikely that it should work in isolation.

How can tighter labor reform help our Economics?
-The problems afflicting the labor market are not simple, nor are the solutions. It is not just a matter of creating work, we must ensure that it is of quality and productive. Redefining the system would require combining greater hiring flexibility for companies with policies to create employment, which would favor worker productivity. The crisis has caused our famous duality to produce some particularly pernicious transition dynamics in the work market.

Perhaps the most dangerous is the large number of people with a long succession of temporary jobs who are increasingly moving into situations of prolonged unemployment. Active policies at employment could help prevent workers from losing human capital in the process. It is not to be expected that labor reform, by itself, will magically create employment. What we can expect is that it will provide a favorable framework and may have some immediate potential, but what is more important is longer-term structural change deadline.