An analysis of the regional differences in the impact of the temporary hiring in Spain

This paper provides empirical evidence on the differences in the use of fixed-term contracts across the Spanish regions, and on its origin. An extension of the traditional Oaxaca-Blinder decomposition to non-linear model is, for the first time, applied to the analysis of these regional differences. Results point to differences in the use of temporality in Spain, as there are significant regional disparities in the use of fixed-term employment as a tool for labour flexibility. These differences have even a higher impact than those caused by regional heterogeneity in workers and firms’ endowment of observable characteristics. In the light of this evidence, policies designed to fight against the anomalously high rate of temporality is Spain should be questioned, as they have not taken into account regional uniqueness.