Documents García-Pérez, Ignacio J. 5 results

"This paper evaluates Spain's 2012 labour market reform concerning the reduction in severance pay from 45 to 33 days of wages per year of seniority and the introduction of a new subsidised permanent contract. We also compare this policy with the introduction of a single open-ended labour contract with increasing severance payments for all new hires. We use an equilibrium search and matching model to generate the main properties of this segmented labour market. Our steady-state results show that this reform will reduce unemployment (by 10.5%) and job destruction (by 7.5%). However, in terms of wage subsidies, the cost of implementing this reform will be very high. A cheaper and more effective way to decrease the duality in the labour market could be to eliminate temporary contracts and introduce a single contract. Unemployment and job destruction in this case could be reduced by 31.5% and 35%, respectively. Most interestingly, tenure distribution could be even smoother than under the designed reform, as 22.5% more workers could have tenures of more than three years and there could be 38.5% fewer one-year contracts. The transition shows that both policy measures would benefit a majority of workers: only 7.4% would experience a decrease in tenure under the approved reform (5.5% in the transition to the single contract) due to the improvement in job stability."

"In this paper, we analyze the sensitivity of the labor market decisions of workers close to retirement with respect to the incentives created by public regulations. We improve upon the extensive prior literature on the effect of pension incentives on retirement by jointly modeling the transitions between employment, unemployment and retirement, paying special attention to the transition from unemployment to retirement (which is particularly important in Spain and other European countries, and whose relevance is increasing as a result of the recent economic crisis).Using administrative data, we find that, when properly defined, economic incentives have a strong impact on labor market decisions. Unemployment regulations are shown to be particularly influential for retirement behavior, along with the more traditional determinants linked to the pension system. Pension variables also have a major bearing on workers' reemployment decisions. The quantitative impact of the incentives, however, is greatly affected by the existence of unobserved heterogeneity among workers. Its omission leads to sizeable biases in the assessment of the sensitivity to economic incentives. We confirm the importance of this potential problem in the case of the change in early retirement provisions legislated in Spain in 2002 (which we analyze with a difference-in-difference approach)."

"Long-term unemployment reached unprecedented levels in Spain in the wake of the Great Recession and it still affects around 57% of the unemployed. We document the sources that contributed to the rise in long-term unemployment and analyze its persistence using state-of-the-art duration models. We find pervasive evidence of negative duration dependence, while personal characteristics such as mature age, lack of experience, and entitlement to unemployment benefits are key to understand the cross-sectional differences in the incidence of long-term unemployment. The negative impact of low levels of skill and education is muted by the large share of temporary contracts, but once we restrict attention to employment spells lasting at least one month these factors also contribute to a higher risk of long-term unemployment. Surprisingly, workers from the construction sector do not fare worse than similar workers from other sectors. Finally, self-reported reservation wages are found to respond strongly to the cycle, but much less to individual unemployment duration. In view of these findings, we argue that active labor market policies should play a more prominent role in the fight against long-term unemployment while early activation should be used to curb inflows."

"This article analyses the transitions into permanent employment of a sample of young temporary employees in Spain for the period 1996–2003. For this purpose, we apply multiple-spell duration techniques to a longitudinal dataset of temporary workers obtained from Social Security registers. Our main findings are as follows. First, the transitions from a temporary contract into unemployment and into another temporary contract are very high when compared with transitions into permanent employment. Second, the entry into permanent employment — although slightly increasing with tenure at the temporary contract — is very low; the only exception is that of semi-skilled and unskilled individuals, who are particularly likely to enter into permanent employment at the 24th and the 36th month of tenure (respectively). Third, we find that there exists a substantial proportion of workers with unobservable characteristics that make them show high exit rates from temporary employment and, at the same time, a rapid exit from unemployment — while the remaining individuals exit from unemployment more slowly, particularly those who are receiving unemployment benefits."

"This study proposes a new approach to the analysis of non-employment and its duration in Germany, Italy and Spain using administrative longitudinal databases. Non-employment includes the discouraged unemployed not entitled to draw unemployment benefits and the long-term inactive. Many of the non-employed individuals will never return to the official labour market. We estimate the magnitude and duration of non-employment, applying the survival methodology developed in recent years to deal with 'workforce disposal'. Long-term non-employment (LTNE) may lead to dramatic changes in individual lifestyles, family and childbearing projects, levels of poverty and welfare at large."