Publication: Promoting permanent employment: lessons from Spain
Authors
Méndez Martínez, Ildefonso
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Publisher
SpringerOpen
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DOI
https://doi.org/10.1007/s13209-012-0088-5
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info:eu-repo/semantics/article
Description
© The Author(s) 2012. This manuscript version is made available under the CC-BY 4.0 license http://creativecommons.org/licenses/by/4.0/
This document is the Published version of a Published Work that appeared in final form in SERIEs - Journal of the Spanish Economic Association. To access the final edited and published work see https://doi.org/10.1007/s13209-012-0088-5
Abstract
This paper analyzes whether the two major labor market reforms implemented in Spain in the 1990s to reduce the share of temporary employment succeed
in promoting flows into permanent employment. The 1994 reform severely restricted
temporary contracts and the 1997 reform introduced a new permanent contract figure with lower payroll taxes and dismissal costs than the ordinary. To evaluate these
non-targeted treatments I present an estimation procedure that uses pre-treatment outcomes to predict the one that would have been otherwise observed in the post-treatment
period in the absence of the treatment and I derive its large sample properties. Using
data from the Spanish Labor Force Survey I find that both reforms failed at reducing
the share of temporary employment because they had no impact on contract conversions, which account for most new permanent contracts. The 1997 reform succeed in
increasing permanent hirings for some groups of workers. My findings suggest that
Spanish employers took advantage of wage and dismissal cost reductions to substitute
permanent contracts for otherwise temporary ones.
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Citation
SERIEs - Journal of the Spanish Economic Association, 2013, Vol. 4, pp. 175–199
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Este ítem está sujeto a una licencia Creative Commons. http://creativecommons.org/licenses/by/4.0/