There has been a 142% increase in young workers in Spain with permanent contracts, thanks to a revamp of the country's labour rules.
Since the global financial crisis, Spain's rates of youth unemployment and under-employment have been some of the highest in Europe, Reuters reports.
Yet after youth unemployment hit 55% in the years following the crisis, the rate declined to 31% in Q3, compared to a 12.6% overall unemployment rate, according to the National Statistics Office, INE.
Although youth unemployment rates have improved in Spain, in the summer of last year, 70% of under-24s had a temporary contract, with this rate dropping 13 percentage points in Q3 this year following the new labour regulations.
Introduced in March, the labour reform was negotiated with employers and unions and scrapped the majority of temporary jobs in a bid to bolster stability and lower the unemployment rate.
Chief economist at the Funcas thinks tank in Madrid. Raymond Torres said stable contracts boost consumer confidence and increase spending. He said the strength of the country's labour market had played a key role in Spain's unexpected economic resilience.
Before the labour reform was implemented, the number of temporary contracts led to a high turnover of jobs, therefore increasing the overall unemployment rate.
"We have put an end to the idea that the introduction of young people into the workforce needs to be done through unstable contracts," Joaquin Perez-Rey, the deputy labour minister, told Reuters news agency.
In addition, Spain's furlough system introduced during the pandemic also increased permanent hiring, according to Adrian Todoli, a labour law professor at the University of Valencia.
"Employers now know that they can bank on these mechanisms if there's a crisis, as was the case during the pandemic," he said.
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