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IZA Discussion Paper No. 18539
April 2026
Restricting Temporary Contracts Increases Firm-Provided Training: Evidence from Spain
Adrjan Pawel, Jonas Jessen, Carlos Victoria Lanzón

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.

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Mark Fallak
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World of Labour
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Christina Gathmann
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Das IZA@LISER-Netzwerk ist eine weltweite Gemeinschaft für exzellente Forschung in der Arbeitsmarktökonomie und angrenzenden Fachgebieten. Nach dem Wechsel von Bonn wird das Netzwerk nun am Luxembourg Institute of Socio-Economic Research (LISER) koordiniert.

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