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Restricting Temporary Contracts Increases Firm-Provided Training: Evidence from Spain

Author

Listed:
  • Pawel, Adrjan

    (Indeed Hiring Lab and Regent's Park College, University of Oxford)

  • Jessen, Jonas

    (WZB and IAB)

  • Victoria Lanzón, Carlos

    (Universidad Complutense de Madrid)

Abstract

We examine whether restricting temporary contracts increases firms' investment in worker training, exploiting Spain's 2022 labour market reform. Using 3.1 million online job postings from 2018 to 2024, we implement a difference-in-differences design that leverages pre-reform variation in reliance on temporary contracts across occupations. More exposed occupations shifted toward permanent hiring and increased advertised training relative to less exposed occupations. Training rose by 4.3 percentage points, fully closing the pre-reform gap by 2024. These results provide evidence that longer expected employment duration increases firms' investment in training, identifying a channel through which labour market regulation can shape human capital formation.

Suggested Citation

  • Pawel, Adrjan & Jessen, Jonas & Victoria Lanzón, Carlos, 2026. "Restricting Temporary Contracts Increases Firm-Provided Training: Evidence from Spain," IZA Discussion Papers 18539, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp18539
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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