Overview
- Fedea reports the reform produced a sharp, widespread fall in Spain’s temporary-employment rate, meeting the law’s core goal of reducing short-term contracts.
- The chance that a young worker signs an indefinite first job rose dramatically from about 14.2% before the reform to roughly 53.8% after it took effect.
- For workers under 30, ordinary permanent contracts became roughly 100 days shorter on average, falling from over 250 days in 2021 to under 150 days in 2023.
- Measured effects on job quality were smaller: the reform cut the gap in first-employment duration by about 40%, raised six-month job survival by about 32%, and narrowed the short-term income gap by about 14%.
- Fedea’s author, Marcel Jansen, urges using a bonus-malus system to reward low turnover and penalize excessive rotation, noting higher voluntary quits and exits after probation may limit any rise in firms’ dismissal costs and contrasting this with the Ministry of Labour’s push for tougher dismissal rules.