The growth in permanent contracts and its potential impact on spending

Lacuesta, Aitor; Barceló, Cristina; Villanueva, Ernesto

doi:10.53479/29793

Cited by 4 publications

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“…(2022) . 8 Beyond the effects on the labor market, the type of contract is also associated different consumption, investment and choices over the life cycle (e.g Adsera, 2006 , Anghel, Barceló, Villanueva, 2023 , Guner, Kaya, Sanchez-Marcos, 2020 ).…”

Section: Data and The Spanish Contextmentioning

confidence: 99%

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The effects of Covid-19 on couples’ job tenures: Mothers have it worse

Lafuente,

Ruland,

Santaeulàlia-Llopis

et al. 2023

Labour Economics

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Section: Data and The Spanish Contextmentioning

confidence: 99%

“…Cabrales et al (2017) ; Garcia-Cabo (2018) ; Hospido et al (2022) . 8 Beyond the effects on the labor market, the type of contract is also associated different consumption, investment and choices over the life cycle (e.g Adsera, 2006;Anghel et al, 2023;Guner et al, 2020 ).…”

Section: Data and The Spanish Contextmentioning

confidence: 99%

The effects of Covid-19 on couples’ job tenures: Mothers have it worse

Lafuente,

Ruland,

Santaeulàlia-Llopis

et al. 2023

Labour Economics

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“…As the majority of temporary contracts in the public sector are interim contracts for unfilled vacancies, compliance with this rule will pose a considerable challenge for recruiting public sector staff. 2 See, for example, Anghel,Barceló and Villanueva (2023), who analyse the possible impact of the 2021 labour market reform on private consumption and precautionary saving by workers switching from a temporary to a permanent contract.…”

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Annual Report 2023

2024

Annual Report

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Recent macroeconomic developmentsDespite the restrictive stance of monetary policy and the high level of geopolitical uncertainty, in 2023 the world economy grew more than expected. This resilience, which varied across geographical areas, was partly underpinned by strong employment in most economies and, in some regions, fiscal policy support.Mention should also be made of disinflation, which was mainly driven by the fall in energy commodity prices, the fading of the supply shocks observed in recent years and monetary policy tightening. Against this background, central banks in emerging economies started to ease their restrictive monetary policy stance, while their counterparts in the main advanced economies paused their interest rate hiking cycles. However, euro area economic activity was observably weak, with the German economy notably sluggish and even contracting slightly. Inflation slowed more than expected and has fallen by 8.2 percentage points (pp) since October 2022 (2.8 pp since March 2023 in the case of core inflation), as the monetary policy of the European Central Bank (ECB) -which set the deposit facility rate at 4% in September -continued to be transmitted forcefully to financing conditions. Amid monetary tightening, weak euro area growth and high uncertainty, the Spanish economy stood out as it recorded growth (2.5%) significantly above the euro area average (0.4%) and initial expectations. As a result, at end-2023 GDP was around 3% higher than its pre-pandemic level. However, GDP per capita in Spain had only risen by 0.3% since end-2019 (against a background of high immigration flows over the last two years), in contrast to the euro area where it stood 2% above its pre-pandemic level.GDP growth was mainly driven by buoyancy in household spending (underpinned by strong job creation amid sliding productivity), government consumption and external demand, while business investment proved considerably sluggish. The high growth rates of tourism-related services explained around one-half of growth in 2023.Meanwhile, the private sector has continued to deleverage, with its debt now down 94 pp of GDP from the peak of 2010. In addition, Spain's current account surplus increased and its negative net international investment position decreased by 7 pp, to 52.8% of GDP, 45 pp below the all-time high recorded in 2014. Meanwhile, the budget deficit and government debt as a percentage of GDP also fell, but they nevertheless remain at high levels.11 Annual Report 2023 -Banco de España FOREWORD BY THE GOVERNOR 11The disinflation process, which began in 2022 Q3, continued in 2023, driven mainly by lower energy prices, while food and core inflation slowed more gradually. In addition, the slowdown in unit profits cushioned the impact of the growth of compensation per employee. The outlook for the coming yearsAgainst a backdrop of high geopolitical uncertainty, global economic growth is expected to stabilise at around 3.2% over the coming years, significantly below that observed over the last two decades (3.8%). Some ...

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The growth in permanent contracts and its potential impact on spending

2023

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Rationale This article analyses what impact the increase in permanent contracts observed over the course of 2022 might have had on household spending. Takeaways •In 2019, workers on permanent contracts devoted 81% (on average) of their household income to spending, compared with 72% for those on temporary contracts. •In the past, having their temporary contract converted to a permanent one has prompted households to increase their spending-to-income ratio by approximately 20% over the following two quarters. •Based on those figures, the conversion of temporary to permanent contracts observed in 2022 could have increased the spending-to-income ratio by between 0.18 and 0.24 percentage points.

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The growth in permanent contracts and its potential impact on spending

Cited by 4 publications

References 10 publications

The effects of Covid-19 on couples’ job tenures: Mothers have it worse

The effects of Covid-19 on couples’ job tenures: Mothers have it worse

Annual Report 2023

The growth in permanent contracts and its potential impact on spending

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