{"id":14216,"date":"2021-05-01T10:00:03","date_gmt":"2021-05-01T08:00:03","guid":{"rendered":"http:\/\/webecpol.esade.edu\/?post_type=publicaciones&p=14216"},"modified":"2026-09-16T18:32:00","modified_gmt":"2026-09-16T16:32:00","slug":"the-labour-market-and-the-labour-force-survey-after-a-year-of-pandemic","status":"publish","type":"publicaciones","link":"http:\/\/webecpol.esade.edu\/en\/publications\/the-labour-market-and-the-labour-force-survey-after-a-year-of-pandemic\/","title":{"rendered":"The labour market (and the Labour Force Survey) after a year of pandemic"},"content":{"rendered":"
\n

– Labour market segmentation is once again behind much of the painful labour market adjustment suffered by the Spanish economy over the last year: the Labour Force Survey (EPA) data for the first quarter of 2021, released this week, indicate that job destruction has been disproportionately concentrated in temporary contracts<\/p>\n

\u2192 any labour market reform, such as the one the Government plans to carry out, must tackle this issue decisively. Otherwise, these workers will bear the brunt of crises and will also see their prospects limited in future recoveries. On the positive side, furlough schemes (ERTEs) have managed to preserve employment relationships that would otherwise have been broken, probably avoiding a deeper crisis in the medium and long term \u2192 this underlines the need to design an ERTE for the new normal.<\/p>\n

– The percentages of unemployed (21%) and employed people (16%) in training are the highest in the series<\/p>\n

\u2192 to turn this cyclical figure into a more structural feature, training and human capital acquisition policies and programmes, both specific and general, must be implemented to carry out the necessary upskilling and reskilling process, especially in a context of adaptation and sectoral change such as the current one.<\/p>\n

– The Recovery Plan designed to channel investment from the Next Generation EU programme has education and knowledge among its key pillars, but we also identify one of the Plan’s main shortcomings: its lack of specificity in these areas<\/p>\n

\u2192 a more specific and decisive commitment to training, not only formal training, is needed, setting out concrete priorities, including in transversal competences and soft skills, which are essential in career guidance and job search.<\/p>\n<\/div>\n

Just a month ago marked one year since the lockdown that began what has been the worst period in terms of economic records in decades. The shutdown of the economy and the confinement of families gave way to a partial reopening that did not prevent many activity indicators from collapsing, particularly in tourism-related sectors. In any case, the fall was widespread and, as we well know, there is still a lot to recover even today.<\/p>\n

Employment followed suit, as shown by the first-quarter Labour Force Survey (EPA) data published yesterday. In this first quarter there were just over 19.2 million people in employment in Spain, 760,000 fewer than in the fourth quarter of 2019 and 475,000 fewer than in the first quarter of 2020. However, and this must be said, the circle has not yet closed and the picture of a year of pandemic, from the labour market perspective, is still incomplete, since the real employment adjustment during the pandemic began in the second quarter of 2020, which opened in the first weeks of April with a total shutdown except for essential activities.<\/p>\n

A year on, several lessons have been learned. The first is that crises are never fully comparable: while the 2008 crisis resulted in more than 3.5 million jobs destroyed at the peak of the series, this time employment hit a low in the second quarter, with a maximum loss of just under 1.4 million jobs. The adjustment in output has been more intense and concentrated in time in this latest recession, which helps to understand the differences between the two crises and their labour market consequences.<\/p>\n

\"\"<\/p>\n

Unemployment rates have also behaved very differently: one year into the 2008 crisis, the rate had risen by more than eight points (after three years it had risen by 16 points), whereas this time, a year later, it has barely risen by two.<\/p>\n

The use of furlough schemes (ERTEs) as a labour adjustment tool in response to the shock<\/em> suffered by companies is the main cause of these differences. The evolution of salaried employees by type of contract since the beginning of 2019 shows this clearly, highlighting two key aspects.<\/p>\n

    \n
  1. Once again, the main employment adjustment in our country has taken place through the destruction of temporary jobs (red line), which could have been even greater had companies not been given the opportunity to use ERTEs. However, this opportunity does not seem to have convinced companies much at first, as the difference between employees on temporary contracts under some form of temporary reduction in working hours and those counted by the EPA was small at that time. This difference also seems to widen in the third quarter, largely due to companies in the hospitality and retail sectors joining the scheme (which would account for half of all temporary workers on ERTEs).<\/li>\n
  2. The adjustment among employees on permanent contracts has been almost imperceptible, and quickly recovered. By the end of 2020 the number of employees on permanent contracts was only 1% below the 2019 average. Obviously, the role played by ERTEs has been much more intense in this case, since without them many of these contracts could have disappeared. For example, if permanent employees on ERTEs were not counted as employed, the loss would have been around 3.2 percentage points in the fourth quarter of 2020, peaking at 17 points in the third.<\/li>\n<\/ol>\n

    However, the right reading of these data is not that ERTEs have disguised the real unemployment figures. Maintaining this argument completely distorts what has happened and the very purpose of the mechanisms applied to prevent employment relationships from breaking down during this year. ERTEs have played an important role in the labour market adjustment process during the worst of the pandemic: traditionally, our labour market has tended to break temporary employment relationships as an adjustment method at the start of each crisis, which is precisely what has happened this time as well; however, if the crisis was severe, the adjustment among temporary workers was later followed by that among permanent ones. ERTEs have sought to avoid this outcome, to prevent the hysteresis that characterises our labour market from subsequently creating a deeper recession and labour adjustment in the medium and long term. The rebound observed in employment, not only permanent but even temporary, in the second half of 2020 tells us that, to a large extent, ERTEs have done their job. The relatively poor figure for the first quarter of 2021 reflects, once again, that the decline in activity in this period has involved temporary contracts, very probably as a result of a third wave and bad weather, which have meant a (hopefully) brief pause in the recovery.<\/p>\n

    This novelty in our labour market is therefore welcome. The lessons have been learned, but now they must be carried forward. The design of these ERTEs has clearly been focused on the specific needs of the pandemic. However, we can extend this option to future crises and even, over time, improve it and give it greater potential. This week, at EsadeEcPol we published a Policy Brief<\/em> setting out the strengths and weaknesses of the Recovery Plan<\/a>, Transformation and Resilience \u201cEspa\u00f1a Puede\u201d, which, in its section on labour policies, mentioned the need to build on this experience and design an ERTE for the \u201cnew\u201d normal, something that seems to be on the agenda of the Ministry of Labour and Social Economy. This time, and moving closer to models such as the German Kurzarbeit<\/em>, the new ERTE design should include conditions for its application, such as training or greater use of reduced working hours. The benefits of this social and labour policy are more than evident, and can make a particular contribution to the future performance of the labour market.<\/p>\n

    Precisely in the area of training for employed and unemployed people, yesterday’s EPA shows a significant fact: during the first quarter of 2021, 16% of employed people and almost 21% of unemployed people said they were studying, whether in formal or non-formal education or both, which represents year-on-year increases of five and 4.6 percentage points, respectively. In absolute terms, more than three million employed people and 750,000 unemployed people were studying or training, whether within or outside official study programmes.<\/p>\n

    \"\"<\/p>\n

    Setting aside cyclical fluctuations resulting from the academic calendar, these are the highest figures in the EPA series since 2005, continuing the trend that began in the third quarter of 2020 towards a larger share of the labour force receiving training. Whether this is a lasting change will depend on various factors, some of which were unforeseen (for example, flexibility and adaptation to lockdown situations at the time, or the boost to distance and online<\/em> learning more generally), but in light of the data the increase appears to be widespread: it is not only occurring among employed people, including those on ERTEs[1]<\/a>, but the figures have also risen considerably among the unemployed.<\/p>\n

    This is especially relevant in a context in which one of the main challenges we face for the recovery is ensuring that those who have lost their jobs find new ones and that those on ERTEs return to theirs, without the employment relationship being lost. To this end, training and human capital acquisition policies and programmes, both specific and general, must be implemented to carry out the necessary process of upskilling <\/em>and reskilling<\/em> (that is, adapting and improving workers’ professional qualifications), especially in a context of adaptation and sectoral change such as the current one.<\/p>\n

    In this regard, one of the factors that can undoubtedly contribute to a lasting change in the number of people in training is a decisive push for public policies in this area. It is therefore worth highlighting that human capital development is a key element of Next Generation EU and the new Recovery and Resilience Facility, as investments and reforms will have to focus on the challenges and investment needs related to the green and digital transitions; for example, Spain has a small population with advanced digital skills and lags far behind the EU in employment of information and communication technology specialists and graduates in science, technology, engineering and mathematics (STEM), areas where there is also a large gender gap.<\/p>\n

    As far as our country is concerned, the \u201cEspa\u00f1a Puede\u201d Plan includes the green and digital transitions among its four priority pillars, accounting for 40% and 30% of investment, respectively. However, as we pointed out in the document cited above, we consider that the Plan’s main shortcoming so far is its lack of specificity in the areas of education, knowledge and innovation. We therefore believe that a more decisive commitment should be made to training, for both employed and unemployed people and both formal and non-formal, which should include not only the priorities set at European level but also transversal competences and soft skills<\/em>, essential in career guidance and job search.<\/p>\n

    In short, labour market segmentation is once again behind much of the painful labour market adjustment suffered by the Spanish economy over the last year. Workers on temporary contracts are once again the ones bearing much of the burden, which is not harmless in the medium and long term, as spells of unemployment, almost always affecting the same people, usually result in a loss of human capital and a cost for their future return to work. Any labour market reform, such as the one the Government plans to carry out, must therefore tackle this issue decisively. Otherwise, these workers will bear the brunt of crises and will also see their prospects limited in future recoveries.<\/p>\n

    —-<\/p>\n

    [1]<\/a> Royal Decree-Law 30\/2020 of 29 September on social measures to protect employment made workers whose contracts were suspended or whose working hours were reduced as a result of a collective ERTE a priority group for access to the training initiatives of the vocational training for employment system.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

    – Labour market segmentation is once again behind much of the painful labour market adjustment suffered by the Spanish economy over the last year: the Labour Force Survey (EPA) data for the first quarter of 2021, released this week, indicate that job destruction has been disproportionately concentrated in temporary contracts \u2192 any labour market reform, […]<\/p>\n","protected":false},"featured_media":4467,"template":"","acf":[],"yoast_head":"\nThe labour market (and the Labour Force Survey) after a year of pandemic - Center for Economic Policy - EsadeEcPol<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"http:\/\/webecpol.esade.edu\/en\/publications\/the-labour-market-and-the-labour-force-survey-after-a-year-of-pandemic\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The labour market (and the Labour Force Survey) after a year of pandemic - 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