The use of permanent contracts across Spanish regions: Do regional wage subsidies work?
This paper evaluates the effect of regional wage subsidies to foster permanent employment for a sample of temporary and unemployed Spanish workers. We study the transition into permanent employment using a new dataset based on administrative Social Security registers named “La Muestra Continua de Vidas Laborales”, which is used for the first time to carry out policy evaluation exercises in the Spanish labor market. This dataset offers important advantages with respect to the Labour Force Survey, given it offers the complete labor history of the worker. Moreover, since we have individual, regional and time variation in our policy measure, we can apply a difference-in-differences estimator to identify the average treatment effect of this policy. Though, these regional policies have been implemented for almost ten years, as far as we know, this is the first attempt to evaluate them. Our main results are that, in average terms, this policy has positive but small effects on the transition rate into permanent employment either from a temporary contract or from unemployment. The incidence of these subsidies, however, is larger when the worker is in a temporary contract. It is also larger for young females while for old male workers do not have any effect. Measured at the average wage subsidy (5100 Euros) the total change in the entrance probability from a temporary to a permanent contract is around 26% for young women, 24% for middle age ones and 22% for middle age men, the most benefited workers. Nevertheless, since the transition rates to permanent contracts at the same firm are pretty low these relative changes hardly generate a change in the transition probability from a temporary to a permanent contract at the same firm. For instance, in the case of young women the estimated transition probability growths from 0.064% to 0.075% while for middle age men it changes from 0.039% to 0.041%.
|Date of creation:||Apr 2007|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: + 34 954 34 8913
Fax: + 34 954 34 9339
Web page: http://www.upo.es/econ/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Martin, John P. & Grubb, David, 2001. "What works and for whom: a review of OECD countries' experiences with active labour market policies," Working Paper Series 2001:14, IFAU - Institute for Evaluation of Labour Market and Education Policy.
- Dale T. Mortensen & Christopher A. Pissarides, 2002.
"Taxes, Subsidies and Equilibrium Labor Market Outcomes,"
CEP Discussion Papers
dp0519, Centre for Economic Performance, LSE.
- Mortensen, Dale T & Pissarides, Christopher, 2001. "Taxes, Subsidies and Equilibrium Labour Market Outcomes," CEPR Discussion Papers 2989, C.E.P.R. Discussion Papers.
- Dale T Mortensen & Christopher Pissarides, 2001. "Taxes, subsidies and equilibrium labor market outcomes," LSE Research Online Documents on Economics 2075, London School of Economics and Political Science, LSE Library.
- Meyer, Bruce D, 1995.
"Natural and Quasi-experiments in Economics,"
Journal of Business & Economic Statistics,
American Statistical Association, vol. 13(2), pages 151-61, April.
- Juan J Dolado & Carlos Garcia--Serrano & Juan F. Jimeno, 2002.
"Drawing Lessons From The Boom Of Temporary Jobs In Spain,"
Royal Economic Society, vol. 112(721), pages F270-F295, June.
- Dolado, Juan J. & Garcia-Serrano, Carlos & Jimeno, Juan F, 2001. "Drawing Lessons From the Boom of Temporary Jobs in Spain," CEPR Discussion Papers 2884, C.E.P.R. Discussion Papers.
- Güell, Maia & Petrongolo, Barbara, 2003.
"How Binding Are Legal Limits? Transitions from Temporary to Permanent Work in Spain,"
IZA Discussion Papers
782, Institute for the Study of Labor (IZA).
- Guell, Maia & Petrongolo, Barbara, 2007. "How binding are legal limits? Transitions from temporary to permanent work in Spain," Labour Economics, Elsevier, vol. 14(2), pages 153-183, April.
- Güell, Maia & Petrongolo, Barbara, 2003. "How Binding are Legal Limits? Transitions from Temporary to Permanent Work in Spain," CEPR Discussion Papers 3931, C.E.P.R. Discussion Papers.
- Maia Güell & Barbara Petrongolo, 2003. "How binding are legal limits? Transitions from temporary to permanent work in Spain," Economics Working Papers 682, Department of Economics and Business, Universitat Pompeu Fabra, revised Jul 2005.
- Maia Güell & Barbara Petrongolo, 2003. "How Binding are Legal Limits? Transitions from Termporary to Permanent Work in Spain," Working Papers 75, Barcelona Graduate School of Economics.
- Richard Blundell & Thomas MaCurdy, 1998.
"Labour supply: a review of alternative approaches,"
IFS Working Papers
W98/18, Institute for Fiscal Studies.
- Anderson, Patricia M. & Meyer, Bruce D., 1997. "The effects of firm specific taxes and government mandates with an application to the U.S. unemployment insurance program," Journal of Public Economics, Elsevier, vol. 65(2), pages 119-145, August.
- Jenkins, Stephen P, 1995. "Easy Estimation Methods for Discrete-Time Duration Models," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 57(1), pages 129-38, February.
- 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.
- Hernanz, Virginia & Jimeno, Juan F & Kugler, Adriana D., 2003.
"Employment Consequences of Restrictive Permanent Contracts: Evidence from Spanish Labour Market Reforms,"
CEPR Discussion Papers
3724, C.E.P.R. Discussion Papers.
- Kugler, Adriana & Jimeno, Juan F. & Hernanz, Virginia, 2002. "Employment Consequences of Restrictive Permanent Contracts: Evidence from Spanish Labor Market Reforms," IZA Discussion Papers 657, Institute for the Study of Labor (IZA).
- Adriana Kugler & Juan F. Jimeno & Virginia Hernanz, 2002. "Employment consequences of restrictive permanent contracts: Evidence from Spanish labor market reforms," Economics Working Papers 651, Department of Economics and Business, Universitat Pompeu Fabra.
- Lawrence F. Katz & Bruce D. Meyer, 1988.
"Unemployment Insurance, Recall Expectations, And Unemployment Outcomes,"
NBER Working Papers
2594, National Bureau of Economic Research, Inc.
- Katz, Lawrence F & Meyer, Bruce D, 1990. "Unemployment Insurance, Recall Expectations, and Unemployment Outcomes," The Quarterly Journal of Economics, MIT Press, vol. 105(4), pages 973-1002, November.
- Yolanda Rebollo Sanz, 2006. "The role of job interruptions, temporary contracts and multi-firm experiences in the temporality trap in Spain," Working Papers 06.31, Universidad Pablo de Olavide, Department of Economics.
- Antoni Cunyat & Elena Casquel, 2004. "The Causes And Consequences Of Temporary Jobs In Spain: A Theoretical-Empirical Approach," Working Papers. Serie EC 2004-18, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- Hahn, Jinyong & Todd, Petra & Van der Klaauw, Wilbert, 2001. "Identification and Estimation of Treatment Effects with a Regression-Discontinuity Design," Econometrica, Econometric Society, vol. 69(1), pages 201-09, January.
- O Blanchard & A Landier, 2002. "The Perverse Effects of Partial Labour Market Reform: fixed--Term Contracts in France," Economic Journal, Royal Economic Society, vol. 112(480), pages F214-F244, June.
- cipollone piero & Anita Guelfi, 2003. "tax credit policy and firms' behaviour: the case of subsidy to open-end labour contract in italy," Temi di discussione (Economic working papers) 471, Bank of Italy, Economic Research and International Relations Area.
- J. Ignacio García-Pérez & Yolanda Rebollo Sanz, 2006.
"The use of permanent and temporary jobs across Spanish regions: Do unit labour cost differentials offer an explanation?,"
06.11, Universidad Pablo de Olavide, Department of Economics.
- José Ignacio García Pérez & Yolanda Rebollo Sanz, 2005. "The use of permanent and temporary jobs across Spanish regions: Do unit labour cost differentials offer an explanation?," Economic Working Papers at Centro de Estudios Andaluces E2005/16, Centro de Estudios Andaluces.
- Besley, Timothy & Case, Anne, 2000.
"Unnatural Experiments? Estimating the Incidence of Endogenous Policies,"
Royal Economic Society, vol. 110(467), pages F672-94, November.
- Timothy Besley & Anne Case, 1994. "Unnatural Experiments? Estimating the Incidence of Endogenous Policies," NBER Working Papers 4956, National Bureau of Economic Research, Inc.
- Heckman, J & Singer, B, 1984. "The Identifiability of the Proportional Hazard Model," Review of Economic Studies, Wiley Blackwell, vol. 51(2), pages 231-41, April.
- José Ignacio García Pérez & Yolanda Rebollo Sanz, 2004.
"Wage changes through job mobility in Europe: A multinomial endogenous switching approach,"
Economic Working Papers at Centro de Estudios Andaluces
E2004/70, Centro de Estudios Andaluces.
- Garcia Perez, Jose Ignacio & Rebollo Sanz, Yolanda, 2005. "Wage changes through job mobility in Europe: A multinomial endogenous switching approach," Labour Economics, Elsevier, vol. 12(4), pages 531-555, August.
- Gruber, Jonathan & Madrian, Brigitte C., 1997. "Employment separation and health insurance coverage," Journal of Public Economics, Elsevier, vol. 66(3), pages 349-382, December.
- F. Alfonso Arellano, 2005. "Evaluating The Effects Of Labour Market Reforms “At The Margin” On Unemployment And Employment Stability: The Spanish Case," Economics Working Papers we051205, Universidad Carlos III, Departamento de Economía.
When requesting a correction, please mention this item's handle: RePEc:pab:wpaper:07.06. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Publicación Digital - UPO)
If references are entirely missing, you can add them using this form.