Virginia Hernanz

Temporary Employment and Segmentation in the Spanish Labour Market: An Empirical Analysis through the Study of Wage Differentials

We aim to add empirical evidence to the already studied field of wage differentials between temporary and permanent workers in Spain. Our goal is to find out which determinants of wage differentials are relevant when explaining such differences. Furthermore, the endogeneity of such feature (the type of contract) is controlled for. The same exercise is done with two data sets: the ECHP and the Structure of Earnings Survey. Results show that wage differentials between temporary and permanent workers are explained by the differences in the distribution of personal and job characteristics in both groups, but not by differences in the rewards for those characteristics. These results remain mostly unchanged during the second part of the 1990’s, using information from five waves of the ECHP, and are robust to different changes in the econometric specification. Copyright Springer-Verlag Berlin/Heidelberg 2004

Dreaming of a permanent job: the transitions of temporary workers in Italy and Spain

Aim of this paper is to shed further light on the transitions of temporary workers towards stable employment in Italy and Spain. The analysis is focused on the transitions of involuntary temporary workers (i.e., those choosing to work on a fixed-term basis only because they could not find any permanent job), comparing their performance with both voluntary temporary workers and the unemployed. The share of involuntary temporary employment is in fact particularly relevant both in Italy and Spain (respectively, 41% and 70% of total temporary workers aged 15-64, against the EU average around 34% in 2002), despite the different incidence of overall temporary work. The institutional similarity between Italy and Spain (tight labour market regulation, extended family networks with low female participation rates, relevant internal regional differences), accompanied by quite different policies for (and subsequent use of) temporary employment, represent an interesting ground to study the transitions of temporary workers towards more stable jobs. The empirical analysis, based on longitudinal micro-data from the Italian and the Spanish Labour Force Survey, actually reveals two different models. Italian unemployed are in fact less likely to find a job than the Spanish unemployed, but the first are more likely to get a stable job than a temporary one. Furthermore, temporary employees in Italy are characterized by a significant probability to get a stable job and a relatively low probability to fall into unemployment. On the contrary in Spain the unemployed are more likely to find temporary jobs rather than remaining in their initial state, but once there they seem to be stuck. Econometric estimates point out that temporary workers in both countries are actually more likely to get a stable job than the unemployed, while no significant differences seem to emerge between involuntary and other temporary employees. Nonetheless, the marginal effect of temporary work experience (holding other factors constant) is much higher in Italy than in Spain (0.25 vs 0.03). Furthermore, the positive effect of temporary work experience may be lower if endogeneity of the initial condition is taken into account, suggesting that temporary workers are from the beginning “stronger” than the unemployed and for this reason, rather than for the temporary work experience itself, they are more likely to get a permanent job.

The changing use of short-time work schemes: Evidence from two recessions:

We explore differences in resort to short-time work schemes between the recessions in the early 1990s and the late 2000s in Spain and Italy and explore how far these are associated with differences in employees’ personal and job-related characteristics. We use individual data from national Labour Force Surveys and perform a multivariate detailed decomposition. We find that participation in these schemes in the second recession would have been even greater without the changes in skills and production structures in both countries.

Short‐Time Work and Employment Stability: Evidence from a Policy Change

This paper investigates whether short†time work (STW) programmes achieve their stated goal of being devices intended to preserve jobs and keep workers employed in times of crisis. Our identification strategy exploits a change in the financial incentives provided to employers and employees for the temporary suspension of work contracts or the reduction of working time. We use longitudinal administrative data and estimate difference†in†differences regressions and instrumental variable bivariate probit models with endogenous covariates, which try to take account of the potential endogeneity of participation in STW. Our results suggest that discretionary policy changes in the incentives of STW schemes can be effective in the short run but they lose their ability when the decline in demand and the lack of work are more permanent.