Temporary Contracts across Generations: Long-term effects of a labour market reform at the margin

We analyse the impact of a labour market reform at the margin (an easier use of temporary contracts launched in Spain in 1984) across generations. As this type of reforms applies to new entrants into the labour market (or, in general, new hired workers), we use a regression discontinuity design to estimate a long-lasting effect on the mean temporary employment rates for generations entering into the labour market compared to those already in the labour market. The results show a relatively small impact related to the reform at the margin. By educational levels, the estimated effect of the reform at the margin on the mean temporary employment rate is close to zero for those with university level education for both genders.