Partial De-Regulation: Fixed-Term Contracts in Italy and Spain

To combat unemployment, in the 1980s most European countries began to de-regulate labour markets. In 1984, atypical contracts were introduced in Italy and Spain. Although the Italian and Spanish economies are widely comparable, and the labour market reforms introduced in the mid-1980s appear similar, the consequences of these reforms have been very different. The unprecedented growth of temporary contracts in the last ten years in Spain has given rise to an extensive theoretical and empirical literature. In Italy, however, the utilisation of atypical contracts has remained limited and much less investigated. This paper has two goals. First it analyses the characteristics of fixed-term contracts in Italy and Spain. Then it investigates the causes that made the Italian and Spanish experience with these contracts so different.