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The use of permanent contracts across Spanish regions: Do regional wage subsidies work?

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  • J. Ignacio García-Pérez

    (Universidad Pablo de Olavide, FCEA and FEDEA)

  • Yolanda F. Rebollo Sanz

    (Universidad Pablo de Olavide)

Abstract

This article evaluates the effectiveness of regional wage subsidies to foster permanent employment using the "Muestra Continua de Vidas Laborales". This dataset, which is used here for the first time to evaluate Spanish labour market policy, offers a complete employment history for each individual, with no aggregation bias. The policy analyzed consists of a one-time subsidy offered by some Spanish regions for new permanent contracts signed for certain fixed-term employees and unemployed workers. Because our policy variable presents individual, regional and temporal variation, we apply a triple difference estimator to identify the average treatment effect of this policy. We conclude that the outflow into permanent employment of eligible workers improves only minimally.

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Bibliographic Info

Article provided by Fundación SEPI in its journal Investigaciones Económicas.

Volume (Year): 33 (2009)
Issue (Month): 1 (January)
Pages: 97-130

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Handle: RePEc:iec:inveco:v:33:y:2009:i:1:p:97-130

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Keywords: Difference-in-difference-in-difference; causal evaluation analysis; wage subsidies; hiring subsidies.;

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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Hora de recordarle al Gobierno los parados y los temporales
    by Samuel Bentolila in Nada Es Gratis on 2011-12-23 07:00:39
  2. Políticas activas de empleo: qué funciona y qué se consigue
    by Samuel Bentolila in Nada Es Gratis on 2013-11-12 06:55:33
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:
  1. J. Ignacio Garcia-Perez & Fernando Muñoz Bullon, 2007. "Transitions into permanent employment in Spain : an empirical analysis for young workers," Business Economics Working Papers wb073808, Universidad Carlos III, Departamento de Economía de la Empresa.
  2. Cervini-Plá, María & Ramos, Xavi & Silva, José I., 2010. "Wage Effects of Non-Wage Labour Costs," IZA Discussion Papers 4882, Institute for the Study of Labor (IZA).
  3. Mario García-Ferreira & Ernesto Villanueva, 2007. "Employment risk and household formation: evidence from differences in firing costs," Banco de Espa�a Working Papers 0737, Banco de Espa�a.
  4. Fernández-Kranz, Daniel & Rodríguez-Planas, Núria, 2011. "The part-time pay penalty in a segmented labor market," Labour Economics, Elsevier, vol. 18(5), pages 591-606, October.
  5. Samuel Bentolila & Juan J. Dolado & Juan F. Jimeno, 2012. "The New New Labour Market Reform in Spain: Objectives, Instruments, and Shortcomings," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 10(2), pages 03-07, 08.
  6. Fernández-Kranz, Daniel & Lacuesta, Aitor & Rodríguez-Planas, Núria, 2010. "Chutes and Ladders: Dual Tracks and the Motherhood Dip," IZA Discussion Papers 5403, Institute for the Study of Labor (IZA).
  7. Cristina Barceló & Ernesto Villanueva, 2010. "The response of household wealth to the risk of losing the job: evidence from differences in firing costs," Banco de Espa�a Working Papers 1002, Banco de Espa�a.
  8. Sergi Jiménez Martín & Judit Vall Castello, 2009. "Business Cycle Effects on Labour Force Transitions for Older People in Spain," Working Papers 2009-25, FEDEA.
  9. Ildefonso Mendez, 2013. "Promoting permanent employment: lessons from Spain," SERIEs, Spanish Economic Association, vol. 4(2), pages 175-199, June.
  10. Yolanda Rebollo Sanz, 2009. "Landing a Permanent Contract: Do Job Interruptions and Employer Diversification Matter?," Working Papers 09.07, Universidad Pablo de Olavide, Department of Economics.
  11. Escudero, Veronica, 2014. "Are active labour market policies effective in activating and integrating low-skilled individuals? An international comparison," MPRA Paper 55319, University Library of Munich, Germany.
  12. J. Ignacio García Pérez & Victoria Osuna, 2012. "Dual Labour Markets and the Tenure Distribution: Reducing Severance Pay or Introducing a Single Contract?," Working Papers 2012-09, FEDEA.
  13. Vall Castello, Judit, 2012. "Promoting employment of disabled women in Spain; Evaluating a policy," Labour Economics, Elsevier, vol. 19(1), pages 82-91.
  14. Inmaculada Garcia & Colin Green & Maria Navarro Paniagua, 2012. "New Estimates of the Effect of Temporary Employment on Absenteeism," Working Papers 24151321, Lancaster University Management School, Economics Department.
  15. Inmaculada Cebrián & Gloria Moreno & Luis Toharia, 2011. "La estabilidad laboral y los programas de fomento de la contratación indefinida," Hacienda Pública Española, IEF, vol. 198(3), pages 103-127, September.
  16. Yolanda Rebollo Sanz & J. Ignacio García-Pérez, 2009. "Do wage subsidies affect the subsequent employment stability of permanent workers?: the case of Spain," Working Papers 09.18, Universidad Pablo de Olavide, Department of Economics.

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