Restricting Temporary Contracts Increases Firm-Provided Training: Evidence from Spain

Adrjan Pawel (), Jonas Jessen () and Victoria Lanzón, Carlos ()
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Adrjan Pawel: Indeed Hiring Lab and Regent's Park College, University of Oxford
Jonas Jessen: WZB and IAB
Victoria Lanzón, Carlos: Universidad Complutense de Madrid

No 18539, IZA Discussion Papers from IZA Network @ LISER

Abstract: We examine whether restricting temporary contracts increases firms' investment in worker training, exploiting Spain's 2022 labour market reform. Using 3.1 million online job postings from 2018 to 2024, we implement a difference-in-differences design that leverages pre-reform variation in reliance on temporary contracts across occupations. More exposed occupations shifted toward permanent hiring and increased advertised training relative to less exposed occupations. Training rose by 4.3 percentage points, fully closing the pre-reform gap by 2024. These results provide evidence that longer expected employment duration increases firms' investment in training, identifying a channel through which labour market regulation can shape human capital formation.

Keywords: temporary employment; on-the-job training; human capital investment; employment contracts (search for similar items in EconPapers)
JEL-codes: J24 J41 J63 J68 (search for similar items in EconPapers)
Date: 2026-04
New Economics Papers: this item is included in nep-bec, nep-eur, nep-hrm and nep-lma
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