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Evaluating the effects of labour market reforms at the margin on unemployment and employment stability: the Spanish case

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  • Arellano, F. Alfonso
Abstract
This study analyses the effects on unemployment and the quality of employment of the Spanish labour market reform in 2001 for the most important age groups. The content of the reform was based on the implementation of two policies: (i) a new permanent contract with lower firing costs than the ordinary one, and (ii) the reduction of the payroll taxes paid by firms to foster creation/ conversion of/ into permanent contracts. This reform extended to further groups of workers similar measures adopted in a previous reform in 1997. Using a data base of unemployed workers in the region of Madrid from January 1997 up to September 2003, and methods for non-experimental data, the results suggest that, regardless of gender, workers below 30 years are negatively affected by the reform, and workers above 55 years show positive but small effects. The influence of the reform for workers between 45 and 50 years is negligible. As regards education, graduates are more sensitive to the reform than workers with a lower level of education (primary and secondary education).

Suggested Citation

  • Arellano, F. Alfonso, 2005. "Evaluating the effects of labour market reforms at the margin on unemployment and employment stability: the Spanish case," UC3M Working papers. Economics we051205, Universidad Carlos III de Madrid. Departamento de Economía.
    • Handle: RePEc:cte:werepe:we051205
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    References listed on IDEAS

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    1. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097, Elsevier.
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    Cited by:

    1. Roberto Leombruni & Michele Mosca, 2011. "The lifetime gender gap in Italy. Do the pension system countervails labour market outcomes?," LABORatorio R. Revelli Working Papers Series 113, LABORatorio R. Revelli, Centre for Employment Studies.
    2. Trevisan, Elisabetta, 2007. "Job Security and New Restrictive Permanent Contracts. Are Spanish Workers More Worried of Losing Their Job?," Working Papers 07-3, University of Aarhus, Aarhus School of Business, Department of Economics.
    3. Kluve, Jochen & Fertig, Michael & Jacobi, Lena & Nima, Leonhard & Schaffner, Sandra & Schmidt, Christoph M. & Card, David & Góra, Marek & Jensen, Peter & Leetmaa, Reelika & Patacchini, Eleonora & van , 2005. "Study on the effectiveness of ALMPs: Research project for the European Commission, DG Employment, Social Affairs and Equal Opportunities. Final report," RWI Projektberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, number 69929.
    4. Sergi Jiménez-Martín & Arnau Juanmarti Mestres & Judit Vall Castello, 2017. "Hiring subsidies for people with disabilities: Do they work?," Policy Papers 2017-11, FEDEA.
    5. F. Alfonso Arellano, 2007. "The Effect of Outplacement on Unemployment Duration in Spain," Working Papers 2007-16, FEDEA.
    6. J. Ignacio García-Pérez & Yolanda F. Rebollo Sanz, 2009. "The use of permanent contracts across Spanish regions: Do regional wage subsidies work?," Investigaciones Economicas, Fundación SEPI, vol. 33(1), pages 97-130, January.
    7. Leombruni Roberto & Mosca Michele, 2013. "The lifetime gender gap in Italy. Does the pension system countervail labour market outcomes?," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201302, University of Turin.
    8. F. Alfonso Arellano, 2010. "Do Training Programmes Get The Unemployed Back To Work? A Look At The Spanish Experience," Revista de Economia Aplicada, Universidad de Zaragoza, Departamento de Estructura Economica y Economia Publica, vol. 18(2), pages 39-65, Autumn.
    9. Sergi Jiménez-Martín & Arnau Juanmartí Mestres & Judit Vall Castelló, 2019. "Hiring subsidies for people with a disability: do they work?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 20(5), pages 669-689, July.
    10. Bosio, Giulio, 2008. "Labour market transition in Italy: an empirical investigation," MPRA Paper 18901, University Library of Munich, Germany.
    11. Yolanda Rebollo Sanz, 2009. "Landing a Permanent Contract: Do Job Interruptions and Employer Diversification Matter?," Working Papers 09.07, Universidad Pablo de Olavide, Department of Economics.
    12. Yolanda Rebollo Sanz & J. Ignacio García-Pérez, 2009. "Do wage subsidies affect the subsequent employment stability of permanent workers?: the case of Spain," Working Papers 09.18, Universidad Pablo de Olavide, Department of Economics.

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