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Reforming an Insider-Outsider Labor Market: The Spanish Experience

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Abstract

This paper presents a case study on reforming a very dysfunctional labor market with a deep insider-outsider divide, namely the Spanish case. We show how a dual market, with permanent and temporary employees makes real reform much harder, and leads to purely marginal changes that do not alter the fundamental features of labor market institutions. While the Great Recession and the start of the sovereign debt crisis triggered two labor reforms, the political economy equilibrium has notallowed them to be transformational enough.

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  • Samuel Bentolila & Juan J. Dolado & Juan F. Jimeno, 2011. "Reforming an Insider-Outsider Labor Market: The Spanish Experience," Working Papers wp2011_1106, CEMFI.
  • Handle: RePEc:cmf:wpaper:wp2011_1106
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    More about this item

    JEL classification:

    • H29 - Public Economics - - Taxation, Subsidies, and Revenue - - - Other
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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