Flexibilization at the Core to Reduce Labour Market Dualism: Evidence from the Spanish Case

Abstract

Institutionalist explanations of the high non-standard employment rate in the Spanish labour market have pointed to the relevance of flexibilization at the margin, that is, the deregulation of non-standard jobs. Using Spanish social security micro data, we find evidence that the liberalization reforms of 2010 and 2012 had flexibilization at their core, that is, greater instability due to open-ended and full-time contracts (erosion of employment protection) and a rise in turnover among periphery workers, increasing the segregation gap. We conclude that there is a high level of deregulation and simultaneous dualization due to the combination of flexibilization at the margin (until 2008) and the core (2010–2012).