The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and national and international economic developments.
Are there any differences in how workers of different skill levels respond to regional shocks? This paper addresses that question using the methodology of Blanchard and Katz (1992) and a unique data set on working-age population, labor force, and employment for five educational groups (ranging from the illiterate to the college-educated) over 1964-92 for the 50 Spanish provinces. The paper finds that the high-skilled migrate very promptly in response to a decline in regional labor demand, while the low-skilled drop out of the labor force or stay unemployed.