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Drawing Lessons from the Boom of Temporary Jobs in Spain

  • Juan José Dolado
  • Carlos García-Serrano
  • Juan F. Jimeno

During the last two decades many EU countries have reformed the set of legal rules that regulate dismissals. And, in contrast with other institutional reforms of the labour market, there seems to be a common strategy of maintaining strict employment protection legislation for workers under the typical "full time"/permanent employment contract, but liberalising "atypical"/temporary/part-time employment contracts for new entrants in the labour market. As a result, the incidence of temporary employment has noticeably increased across the EU, being Spain the paramount case in this regard. In this paper we aim at two goals. First, we take stock of the available Spanish evidence regarding the consequences of a dual labour market -in which one-third of employees are under very flexible employment contracts with low severance payments and two-thirds are under permanent employment contracts with very high employment protection- and the lessons which can be drawn for other countries. Secondly, we address the puzzle of why temporary employment in Spain, despite of recent labour market reforms which have reduced firing costs under the permanent contract and restricted the use of temporary contracts, remains so high.

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Paper provided by FEDEA in its series Working Papers with number 2001-11.

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Handle: RePEc:fda:fdaddt:2001-11
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  1. Juan J. Dolado & Florentino Felgueroso & Juan F. Jimeno, . "The effects of minimum bargained wages on earnings: Evidence from Spain," Working Papers 97-04, FEDEA.
  2. Alison L. Booth & Marco Francesconi & Jeff Frank, 2002. "Temporary Jobs: Stepping Stones or Dead Ends?," LABORatorio R. Revelli Working Papers Series 8, LABORatorio R. Revelli, Centre for Employment Studies.
  3. Maia Guell, 2000. "Fixed-term contracts and unemployment: an efficiency wage analysis," LSE Research Online Documents on Economics 20181, London School of Economics and Political Science, LSE Library.
  4. Gilles Saint Paul, 2000. "Flexibility vs. rigidity: Does Spain have the worst of both worlds?," Economics Working Papers 450, Department of Economics and Business, Universitat Pompeu Fabra.
  5. Bentolila, Samuel & Bertola, Giuseppe, 1990. "Firing Costs and Labour Demand: How Bad Is Eurosclerosis?," Review of Economic Studies, Wiley Blackwell, vol. 57(3), pages 381-402, July.
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  7. Miguel �. Malo, 2000. "A Simple Model of Severance Pay Determination: The Case of Individual Dismissals in Spain," LABOUR, CEIS, vol. 14(2), pages 269-290, 06.
  8. Boeri, Tito, 1999. "Enforcement of employment security regulations, on-the-job search and unemployment duration," European Economic Review, Elsevier, vol. 43(1), pages 65-89, January.
  9. Olivier Blanchard & Augustin Landier, 2001. "The Perverse Effects of Partial Labor Market Reform: Fixed Duration Contracts in France," NBER Working Papers 8219, National Bureau of Economic Research, Inc.
  10. Victor Aguirregabiria & Cesar Alonso-Borrego, 2014. "Labor Contracts And Flexibility: Evidence From A Labor Market Reform In Spain," Economic Inquiry, Western Economic Association International, vol. 52(2), pages 930-957, 04.
  11. Bentolila, Samuel, 1997. "Sticky labor in Spanish regions," European Economic Review, Elsevier, vol. 41(3-5), pages 591-598, April.
  12. De la Rica Goiricelaya, Sara & Felgueroso, Florentino, 2002. "Wage differentials between Permanent and Temporal Contracts: Further Evidence," DFAEII Working Papers 2002-07, University of the Basque Country - Department of Foundations of Economic Analysis II.
  13. Juan F. Jimeno & Luis Toharia, 1993. "The effects of fixed-term employment on wages: theory and evidence from Spain," Investigaciones Economicas, Fundación SEPI, vol. 17(3), pages 475-494, September.
  14. Arellano, Manuel & Bentolila, Samuel & Bover, Olympia, 2001. "The Distribution of Earnings in Spain During the 1980s: The Effects of Skill, Unemployment and Union Power," CEPR Discussion Papers 2770, C.E.P.R. Discussion Papers.
  15. J Jimeno & C Serrano, 1999. "Labour Reallocation, Labour Flaws and Labour Market Institutions: Evidence from Spain," CEP Discussion Papers dp0414, Centre for Economic Performance, LSE.
  16. Cabrales, Antonio & Hopenhayn, Hugo A., 1997. "Labor-market flexibility and aggregate employment volatility," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 46(1), pages 189-228, June.
  17. Bentolila, Samuel & Saint-Paul, Gilles, 1991. "The Macroeconomic Impact of Flexible Labour Contracts: An Application to Spain," CEPR Discussion Papers 596, C.E.P.R. Discussion Papers.
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