Labor market reform
Labor market reform latest publications
Permanent contracts increased by 209% in the first half of 2022 compared to pre-pandemic records, while temporary contracts fell by 37%, bringing the temporary employment ratio to its lowest level since 1985. However, it is still too early to accurately assess the transitory and permanent effects of the labour reform.
June 21, 2022
Spain | More permanent contracts in May, and fewer indefinite duration temporary contracts
The May 2022 contract statistics confirmed the upturn in permanent contracts, especially among younger people, and the fall in the number of temporary contracts, focused on those of indefinite duration.
The increase in temporary employment boosted Social Security enrollment (213,600 people) last month, while unemployment fell (-99,500 people). Seasonally adjusted, this pattern was maintained. Employment grew (70,000 people) and the temporary employment ratio (up to 63%) while unemployment fell (-55,000).
May 17, 2022
Spain | Effect of the labour reform? Increase in permanent contracts, more in young people
The contracts statistics confirmed the increase in permanent contracts and the reduction in temporary ones. As a result, the temporary employment ratio declined, especially among the youngest people.
Affiliation increased last month (184,600 people) -driven by permanent employment- and unemployment fell (-86,300 people). Seasonally adjusted, this pattern was maintained. Employment grew (90,000) and the temporary employment ratio fell (to 58%) and unemployment (-50,000).
Enrollment increased in March (140,200 persons), temporary employment fell (to 69.3%) and unemployment barely change (-2,900 persons). Seasonally adjusted, this pattern was confirmed. In 1Q22, Social Security affiliation (1.2% t/t CVEC) and hiring (1.5%) grew while registered unemployment fell (-5.4%).
Social Security affiliaton increased last month (67,100 jobs) while temporary hiring and unemployment fell (to 78.1% and -17,200 unemployed), in line with expectations. Seasonally adjusted, this performance was maintained: 88,000 more jobs, 74,000 fewer unemployed and a temporary employment ratio drop to 82%
Once the labor reform has been approved, the next step will be to evaluate its effects, although mostly they will only be seen in the medium and long term. The authorities must ensure that the fall in temporary employment does not come at the expense of lower growth in job creation.