Date of Award

12-1998

Degree Name

Doctor of Philosophy

Department

Economics

First Advisor

Dr. Wei-Chiao Huang

Second Advisor

Dr. Matthew Higgins

Third Advisor

Dr. Susan Houseman

Abstract

In an effort to promote employment flexibility and reduce the unemployment rate, Spanish authorities deregulated temporary employment in the early 1980s. Nonetheless, the deregulation of temporary employment took place at the margin, favoring the development of a dual labor market in which temporary workers constituted a second class of workers involuntarily employed and enduring limited advancement opportunities.

Using data from the Spanish labor force survey, Spanish temporary employment and job transitions into and out of temporary employment are examined. The study first evaluates the incidence of Spanish temporary employment and its involuntary and demand-led character. Secondly, the analysis reveals temporary workers’ high tendency to perpetuate their precarious labor force status. How can public policy facilitate temporary workers’ transitions to permanent employment?

In two Royal Decrees-Law from 1997 (RD 8/1997 and RD 9/1997), labor unions, employers’ organizations and the Spanish Government approved on the provision of various employers’ incentives when temporary contracts were converted to permanent contracts or when hiring is done using indefinite contracts. Incentives included reductions in social security taxes and severance payments in the event of a dismissal. However, the adopted policy measures have barely modified the conversion rate of temporary contracts into permanent contracts and the percentage of the Spanish workforce on temporary work arrangements. With the purpose of improving the effectiveness of future employment policies, this research uses establishment level data to examine employers’ conversion of temporary contracts into permanent contracts and their temporary employment hiring patterns. The analysis uncovers employers’ flexibility needs and workers’ representation as major determinants of the proportion o f the establishment’s workforce on temporary contracts and the fraction of temporary contracts being converted to permanent contracts. Additionally, the results confirm the importance of hiring and dismissal costs on the hired proportion o f temporary workers per establishment. However, employers’ decision to convert temporary contracts to permanent contracts does not appear to be significantly affected by hiring and dismissal costs. This finding might help understanding the inefficacy displayed by the adopted policy measures in promoting contract conversions from a temporary to a permanent status. Policy implications following these results are subsequently discussed.

Access Setting

Dissertation-Open Access

Additional Files
1998_Dorantes_C_CSO.pdf (194 kB)
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