An overview of Spanish labour market reforms, 1985-2002

Most European countries are affected by high unemployment rates. Among the OECD countries, the performance of the Spanish labour market is among the worst as far as employment activity is concerned, with unemployment rates during the 1990s having reached levels far exceeding 20%. Accordingly, employment creation has been one of the primary challenges facing the Spanish government since 1980. We follow the approached used by the OECD, by which a division into passive and active policies is established, which is used by a significant number of scholars. While passive policies are those which act as a buffer against unemployment, active policies are geared towards solving the labour-related problems from their roots, so to speak. The present report is organised as follows. First, we will introduce the nature of the unemployment problem in Spain and explore its main causes. In Section II, we go on to survey the current state of the Spanish labour market, dividing the labour reforms into passive and active policies. Upon discussing passive policies, we will analyse in some detail the reform of May 2002, which has provoked a general strike in Spain. Section III provides the historical context and identifies the paradigms at work, laying particular emphasis on the Reforms of 1994 and 1997, as well as the different reforms carried out on part-time work. We will also discuss there what constitutes in our opinion two of the most important features of the Spanish labour market: the issues of segmentation and collective bargaining in Spain. This discussion could serve as a basis for stimulating future research on the idiosyncratic features of the Spanish labour market