Spain | Less temporary employment, more stable labor?

Summary

Four years after the last labour reform, the rate of temporary employment in the Spanish labour market has unquestionably fallen. Yet, there is still a high rate of labor turnover and fairly heavy transitions from employment to unemployment.

Key points

• Key points:
• Since the reform took effect, the temporary employment rate has dropped to an all-time low. According to the Labor Force Survey, it fell from 26.3% in 2019 to 15.1% in the first quarter of 2025, nearing the EU average (12.4%).
• However, there are some caveats. First, temporary employment in the public sector remains high (28.0% in the first quarter of 2025) and has hardly budged following the reform.
• Second, despite the sharp increase in the number of permanent seasonal contracts, Social Security registrations have stabilized at around 920,000 since the start of 2023.
• Third, Spain continues to have one of the highest labor turnover rates in Europe: every quarter, more than 3.4 million people between 20 and 59 years of age change their employment situation.
• Fourthly, there is concern over the fragility of labor transitions. Despite the pick-up in outflows from unemployment into employment as a result of the post-pandemic recovery, the transition rate from employment to unemployment in Spain continues to be much higher than in the wider EU.

Geographies

Topics

Tags