The Spanish labor market after the pandemic: impact of the generalization of job retention schemes

Abstract

The aim of this paper is to analyze if the generalization of job retention schemes in Spain in the pandemic has implied a change in the way labor adjusts during crisis, hence converging to the European experience, where these mechanisms have been the typical way of facing recessions. To answer this question, we compare the last two crises in Spain and the Eurozone. During the pandemic, we identify a drastic change in the relationship between economic activity and employment in Spain, linked to a massive use of job retention schemes. The last section discusses the need to consolidate this change in the future, facilitating the use of these schemes in normal times, and also as a way to ease workers’ transitions between jobs and reducing time in unemployment.

Keywords:

employment, unemployment, working-time reduction, job retention schemes, temporary contracts, internal flexibility, productivity per hour, COVID-19

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