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Evaluating The Effects Of Labour Market Reforms “At The Margin” On Unemployment And Employment Stability: The Spanish Case

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  • F. Alfonso Arellano

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Abstract

This study analyses the effects on unemployment and the quality of employment of the Spanish labour market reform in 2001 for the most important age groups. The content of the reform was based on the implementation of two policies: (i) a new permanent contract with lower firing costs than the ordinary one, and (ii) the reduction of the payroll taxes paid by firms to foster creation/ conversion of/ into permanent contracts. This reform extended to further groups of workers similar measures adopted in a previous reform in 1997. Using a data base of unemployed workers in the region of Madrid from January 1997 up to September 2003, and methods for non-experimental data, the results suggest that, regardless of gender, workers below 30 years are negatively affected by the reform, and workers above 55 years show positive but small effects. The influence of the reform for workers between 45 and 50 years is negligible. As regards education, graduates are more sensitive to the reform than workers with a lower level of education (primary and secondary education).

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Bibliographic Info

Paper provided by Universidad Carlos III, Departamento de Economía in its series Economics Working Papers with number we051205.

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Date of creation: Feb 2005
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Handle: RePEc:cte:werepe:we051205

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  1. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097 Elsevier.
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Cited by:
  1. 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.
  2. J. Ignacio García-Pérez & Yolanda Rebollo, 2007. "The Use of Permanent Contracts Across Spanish Regions: Do Regional Wage Subsidies Work?," Working Papers 2007-08, FEDEA.
  3. Roberto Leombruni & Michele Mosca, 2011. "The lifetime gender gap in Italy. Do the pension system countervails labour market outcomes?," LABORatorio R. Revelli Working Papers Series 113, LABORatorio R. Revelli, Centre for Employment Studies.
  4. Bosio, Giulio, 2008. "Labour market transition in Italy: an empirical investigation," MPRA Paper 18901, University Library of Munich, Germany.
  5. Trevisan, Elisabetta, 2007. "Job Security and New Restrictive Permanent Contracts. Are Spanish Workers More Worried of Losing Their Job?," Working Papers 07-3, University of Aarhus, Aarhus School of Business, Department of Economics.
  6. F. Alfonso Arellano, 2005. "Do Training Programmes Get The Unemployedback To Work?: A Look At The Spanish Experience," Economics Working Papers we052515, Universidad Carlos III, Departamento de Economía.
  7. Leombruni Roberto & Mosca Michele, 2013. "The lifetime gender gap in Italy. Does the pension system countervail labour market outcomes?," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201302, University of Turin.
  8. F. Alfonso Arellano, 2007. "The Effect of Outplacement on Unemployment Duration in Spain," Working Papers 2007-16, FEDEA.

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