Coping with Turbulent Economic Times: Establishments’ Employment Adjustment Practices by Gender and Contract Type

Using a representative dataset of Spanish establishments and the quasi-experimental nature of the Great Recession, which started with the unexpected fall of Lehman Brothers, we examine how employers’ labour practices adjust to economic shocks. The establishment-level provides an insightful perspective on how firms deal with economic downturns in segmented labour markets. Although during the recession, temporary job creation and destruction continued to be greater than permanent job creation and destruction, the downturn severely impacted establishments’ permanent, as opposed to temporary, job creation and destruction rates. Furthermore, its impact on net job rates did not differ much by gender, except in construction, due to its primarily male workforce. Finally, as expected, establishments’ employment adjustment dynamics generally conformed to those of an aggregate shock impacting the whole economy. Nevertheless, a closer look at industry and region confirms some especially hard-hit sectors and regions, such as the construction industry, and the Canary and Balearic Islands.