Much praise, but the Spanish labor reform has many limitations

In 2022, Spain adopted a major labor reform, reducing the use of temporary contracts. Hailed as a success by many, even in Italy, analyzing the numbers and data, the benefits are not so clear and the costs could emerge once the Spanish economy stops growing at a rapid pace after the recovery from the Covid. One of the main measures of the now outgoing Sánchez government, the reform was extremely divisive and passed by a single vote cast by mistake of the Populars. To evaluate its impacts, it is necessary to understand the Spanish labor market. Spain has one of the highest unemployment rates (ratio of jobseekers to labor force) in Europe, but it has also seen its labor force double since 1960, while in Italy it has increased by only 30 percent. This factor in itself contributes to the high unemployment rate and to the differences with Italy, which has a lower unemployment rate but a much higher inactivity rate (people not looking for work out of the total population).