Spain | Less temporary employment, more stable labor?

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.

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