Transitions into Permanent Employment in Spain: An Empirical Analysis for Young Workers

Abstract

We analyze the Spanish temporary workers' transitions into permanent employment and to what extent those who become unemployed are able to achieve a permanent job. Our focus is placed on the role of the individual's sequence of temporary contracts on the probability of moving from temporary into permanent employment. We apply multiplespell duration techniques to a longitudinal dataset of temporary workers obtained from Social Security records for the period 1996-2003. We basically find that even though transitions into permanent employment increase with tenure, temporary jobs do not constitute stepping stones towards permanent employment, since the probability of obtaining a permanent job decreases with repeated temporary jobs. Results also show that individuals with high duration of unemployment flow into permanent work less frequently.Keywords: Employment and unemployment hazard rates, duration dependence, unobserved heterogeneity, labor market reforms in Spain JEL Classification: J24, J62.

Established, accelerated and emergent themes in flexible work research

“…Research frequently highlights the challenges facing young people who hope to achieve well paid, skilled work, or those simply hoping for find stable employment in countries such as Spain (García-Pérez and Muñoz-Bullón, 2011) and Greece (Kretsos, 2011).…”

¿Es la precariedad igual para todos los trabajadores temporales? Diferencias y semejanzas entre clases sociales

“…En ese caso, la mayor probabilidad se da a partir del cuarto trimestre después de haber sido contratado temporalmente. Este fenómeno también se ha hallado en Holanda (De Graaf-Zijl, Van den Berg y Heyma, 2011), en Italia (Gagliarducci, 2005) y en otras investigaciones sobre España con datos de hace más de diez años (Güell y Petrolongo, 2007;García-Pérez y Muñoz-Bullón, 2011).…”

The Dynamics of Temporary Jobs in the Tourism Industry

“…On the other hand, there are at least two reasons why temporary employment might represent a "springboard" to permanent employment (García-Pérez & Muñoz-Bullón, 2011). First, according to the matching approach, firms may use temporary contracts as a screening device in order to identify the best matches: in this case, more-able workers might signal their type by making themselves available for screening under temporary contracts.…”

“…Casquel & Cunyat (2005) analyze whether the existence of observable and unobservable characteristics influences the transition rate to a permanent employment and conclude that in Spain temporary contracts do not play this role. García-Pérez & Muñoz-Bullón (2011) analyze temporary workers' transitions into permanent employment for workers under 26 years-old. They find out that the conversion rate from temporary into permanent employment is very low, and that individuals with long unemployment duration flow into permanent work less frequently.…”