ABSTRACT
This chapter explains the puzzling differences in the unemployment experiences of Portugal and Spain. It looks at both countries, not only in static, but also in dynamic terms and considers economic, institutional and historical factors. The chapter provides a more detailed comparison between the two countries, moving from a general perspective to a more labour market focused perspective. It attempts to build a coherent explanation for the evolution of the pattern of unemployment since the countries joined the European Economic Community (EEC). While the unemployment rate was still rather similar in both countries around 1974, unemployment started to increase in the late 1970s and when Spain joined the EEC its unemployment rate was already above 20 per cent. Despite this strong performance, massive unemployment persisted revealing the inability of the Spanish economy to absorb the people joining the labour force for the first time.
