Work Transitions into and Out of Involuntary Temporary Employment in a Segmented Market: Evidence from Spain

Abstract

The dual character of the Spanish labor market, with permanent workers on the one hand and less favored peripheral workers on the other, became more pronounced following the deregulation of temporary employment. This paper uses the Spanish Labor Force Survey to assess whether, as predicted by labor market segmentation theories, temporary employment is non-transitional (permanent) and involuntary. An analysis of the rates and dynamics of transitions into and out of temporary employment across different groups of working-age respondents shows that much of Spanish temporary employment is involuntary, with temporary workers having limited opportunities for advancement. The evidence points to the need for public policy to address problems posed by the trap that temporary employment has apparently become for growing numbers of workers.