Labour Market Reforms Under The Recovery And Resilience Facility: Evidence From France And Spain

Labour market reforms constitute a significant component of the Recovery and Resilience Facility (RRF) national plans, reflecting the importance of employment stability, job quality, and labour market resilience in the EU’s post-pandemic recovery strategy. This chapter examines two major labour market reforms supported by the RRF: the reform of the unemployment insurance system in France and the simplification of employment contracts in Spain. Although implemented through different policy instruments, both reforms aim to reduce the prevalence of (shortduration) temporary contracts, limiting labour market turnover and supporting job stability. The analysis presents the reforms’ rationale and assesses their impacts based on descriptive and econometric evidence. The results point to positive labour market impacts of the reforms. In Spain, the reform led to a marked reduction in temporary employment and appears to have improved employment stability. In France, the evidence suggests increased transitions from unemployment to employment without significant effects detected on temporary and aggregate employment. The chapter concludes with a discussion of implications for the design and monitoring of labour market reforms under EU instruments.