Escaping the Trap of Temporary Employment: Precariousness Among Young People before and after Spain's 2021 Labour Market Reform Act

Temporary employment has been the core dimension of employment precariousness in Spain for decades. In December 2021, a labour market reform aimed at reducing the use of fixed-term contracts, which especially affected young people, was passed. This research compares the situation of young workers before and after this labour market reform, with the objective of identifying internal differences among this age group. The results show a substantial reduction in the prevalence of temporary employment after the reform, although they also show that temporary employment, as well as incipient forms of precariousness such as involuntary part-time employment, are more concentrated than before among the most disadvantaged in this age group, following traditional patterns of segmentation in the labour market. This research, therefore, provides insights into which profiles of young workers were better off after the reform and which were not, offering valuable lessons for other countries with similar labour market challenges.

Overall, the labour market reform approved in December 2021 has somewhat improved the situation of labour market precariousness that a very high percentage of young Spanish workers were experiencing at the time. This indicates that the effects that certain policy recommendations based on economic orthodoxy have had on the working population can be counteracted by political action, by passing the necessary legislative reforms. However, greater monitoring and sanctions by government against the fraudulent use of certain types of contracts is necessary to prevent employers from misusing legally and formally accepted employment contract types. The increase in involuntary part-time employment in elementary occupations could be an indicator of this misuse, with companies hiring part-time workers to perform tasks that are in reality full-time.