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Reforming Dual Labor Markets: “Empirical” or “Contractual” Temporary Rates?

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  • J. Ignacio Conde-Ruiz
  • Manu García
  • Luis A. Puch
  • Jesus Ruiz

Abstract

This paper analyzes the impact of the 2021 labor reform in Spain on job creation, job destruction, and employment duration using new daily comprehensive administrative data. The reform’s primary objective was the mitigation of the temporary employment rate; however, despite the success in reducing the nominal temporary employment rate, the evidence suggests that employment stability in terms of duration has not significantly improved. The Spanish experience demonstrates that it is possible to design a labor reform that is highly effective in reducing the “contractual” temporary employment rate in a dual labor market, but with minimal impact on duration and short-term employment transitions, i.e. the “empirical” temporary employment rate.

Suggested Citation

  • J. Ignacio Conde-Ruiz & Manu García & Luis A. Puch & Jesus Ruiz, 2023. "Reforming Dual Labor Markets: “Empirical” or “Contractual” Temporary Rates?," Studies on the Spanish Economy eee2023-36, FEDEA.
    • Handle: RePEc:fda:fdaeee:eee2023-36
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    References listed on IDEAS

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    4. Saint-Paul, Gilles, 2000. "The Political Economy of Labour Market Institutions," OUP Catalogue, Oxford University Press, number 9780198293323.
    5. Bentolila, Samuel & Saint-Paul, Gilles, 1992. "The macroeconomic impact of flexible labor contracts, with an application to Spain," European Economic Review, Elsevier, vol. 36(5), pages 1013-1047, June.
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