Labour market segmentation in Spain: is legislation leading to a reduction in duality?

Abstract

In the last decades, the Spanish legislature has expressed its concern regarding thenegative impact of the existing duality in its national labour market. Many of the employment Actsadopted in the last few years specifically mention this problem in their preambles.In order to analyse the effectiveness of the measures adopted about this question it is necessary tohighlight the two different ways to approach the problem of duality. On the one hand, the existing dualitycould be reduced by making the access to temporary contacts of employment harder (reducing thenumber and the possibilities of temporary contracts and increasing the labour cost of these contracts) Onthe other hand, protection to open-ended contracts could be loosened so that differences of protection inboth kind of contracts would be shortened. For some years the focus was on reducing hiring flexibility.Since the economic crisis of 2008, and in accordance with the recommendations of the European Council,initiatives to combat the duality of the Spanish labour market have affected firing flexibility. Thispaper studies the effectiveness and consequences of those policies.