Who downsizes for longer? A longitudinal analysis

This contribution investigates why firms keep on downsizing once they have started to do so. From a theoretical standpoint, we develop economic and institutional explanations for explaining corporate downsizing duration. The empirical work is carried out applying event history techniques to a sample of manufacturing firms drawn from the Spanish Survey on Business Strategies from 1994 to 2005. Although results show support for persistence in downsizing over time, repeated personnel reductions is not a widespread tool in managing the workforce in this country. In addition, we find certain key corporate parameters such as profitability, temporality rate, size and employment termination costs (as well as market demand trends) to be important determinants of the continuation of on-going downsizing experiences. This is the first study on this issue using corporate-level data for Spain and multivariate methods.Downsizing duration, Spain, Organizational learning, Manufacturing firms, Temporary contracts, Employment termination costs

The gap between male and female pay in the Spanish tourism industry

This paper analyzes wage differentials between male and female workers in the Spanish tourism industry, using a large, administratively matched employer-employee data set obtained from a representative sample of companies. This allows us to control for unobserved firm-specific factors likely to affect the magnitude of the gender wage gap. Our findings indicate that male workers earn on average 6.7% higher monthly wages than their socially comparable female counterparts. In particular, the type of contract held, the qualifications required for the job and the specific sub-sector of employment are very important variables in explaining this gender wage difference. We also find that only around 12% of the mean wage difference in the tourism industry cannot be explained by differences in observable characteristics, which is well below the average for the rest of the industries in Spain (87%). Our interpretation is that minimum wage legislation provides a particularly effective protection to women in the tourism industry, which is characterized by a large number of low-wage earners.Spanish tourism industry, Wage discrimination, Blinder-Oaxaca decomposition, Censored models

JOB MATCHING QUALITY EFFECTS OF EMPLOYMENT PROMOTION MEASURES FOR PEOPLE WITH DISABILITIES

In this article, we evaluate the influence that employment promotion measures designed for disabled people have on the latter’s job matching quality through the use of matching analysis. We focus on two aspects of quality: the type of contract held (either permanent or temporary) and whether or not the individual is searching for another job. We find that employment promotion measures do not improve the match’s job quality. Furthermore, the use of specialized labour market intermediation services by disabled individuals does not affect their job matching quality. As an additional contribution, our definition of disability eludes the self-justification bias.

Working career progress in the tourism industry: Temp-to-perm transitions in Spain

In this article, we analyze the dynamics of temporary workers’ transitions into permanent contracts for workers related to the tourism industry. For this purpose, we use an administrative retrospective dataset from Spanish Social security records. Results show that while individuals with a weaker attachment to the tourism industry achieve open-ended contracts sooner than in most other industries, on the contrary, it takes more time to those with a greater attachment to the tourism industry to exit from the temporary status. In addition, we find that for workers substantially engaged in the tourism industry, it takes more time to reach an open-ended contract when they have held between six and ten contracts in the past (as opposed to holding only one previous contract). On the contrary, for individuals with a weaker attachment to the tourism industry, holding between two and ten previous contracts implies a quicker exit from temporality.Temporary employment, Temporality trap, Spanish tourism industry

The sustainability of start-up firms among formerly wage workers

In this paper we analyse the survival of start-up firms among formerly wage workers in Spain. In particular, we address the question of how long do these workers remain self-employed before entering into unemployment or returning to a new paid-employment, using well-known duration model techniques. Results show that a higher survival rate in self-employment is associated to men, prime-age workers and individuals with higher previous labour turnover. Moreover, longer unemployment spells are found to speed up the rate of transition to non-employment and to reduce that to paid employment. Finally, the probability of exiting decreases with duration in self-employment.Self-employment, Duration analysis

Does downsizing improve organizational performance? An analysis of Spanish manufacturing firms

The objective of this study is to examine the effect of downsizing on corporate performance, considering a sample of manufacturing firms drawn from the Spanish Survey of Business Strategies during the 1993- 2005 period. No significant differences in post-downsizing performance arise between companies which downsize and those that do not. Likewise, we find that substantial workforce reductions through collective dismissals do not either lead to improved performance levels. Downsizing, therefore, may not be a way for managers to increase performance, particularly in a context like the Spanish one, where the labour market is characterized by a high protection of employees’ rights and substantial contract termination costs.Downsizing, Corporate performance, Spanish labour market

Downsizing implementation and financial performance

In the present study we explore the relationship between downsizing decisions and corporate financial performance after top management has decided to downsize. Our focus is on the financial consequences arising from the amount of downsizing and the use of disengagement incentives. For this purpose, we use a sample of downsizing announcements in the Spanish press from 1995 up to 2001. Although the results show that the amount of downsizing is not significantly related to post-downsizing profitability, the evidence provided supports the finding that the use of disengagement incentives (which motivate workers to leave the organization) is negatively related to firm performance. Our analysis helps to understand the role that strategic downsizing decisions play in explaining observed variance in the performance of downsized firms. Thus, it advances scholarly organizational research by reinforcing the concept that corporate performance is not only contingent on strategies, but also influenced by the means through which these strategies are implemented.Downsizing, Disengagement incentives, Corporate performance, Spanish labour market

Exits from unemployment: recall or new job

This paper studies transitions out of unemployment in Spain distinguishing between recall to the same employer and reemployment in a new job. We use a large sample of newly unemployed workers obtained from Social Security records for Spain. These data contain information about each individual's employer identy before and after the unemployment spell. A discrete-time duration model with competing risks of exits serves us to investigate the factors that influence the probabilities of leaving unemployment to return to the same employer or to find a new job with a different employer. We find that the route to exit unemployment is determinant to understand the influence of individual an job characteristics on the hazard rate, as well as the latter dependence on unemployment duration. The recall hazard rate exhibits positive duration dependence during the first months and negative duration dependence thereafter (it is larger for females), while the new-job hazard presents positive duration dependence (it is larger for males).