Impact of the crisis on the employment of foreigners: Evidence based on labor transitions of permanent workers

Abstract

This paper analyzes labor market transitions among foreigners with permanent contracts over the period 2006-2010, taking into account the last years of the economic boom in Spain and the initial years of the crisis. The study uses data from the cross-sectional and longitudinal versions of the Labor Force Survey conducted by the National Statistics Institute of Spain. The results show that foreigners face challenges in finding stable jobs in the labor market and have a greater propensity for downward trajectories than the Spanish. Being female, young, employed in the construction sector, having an unskilled job and a short-term contract are risk factors that explain the passage of non-nationals from permanent to temporary employment or unemployment. However, we find that foreigners remain in stable employment as well as patterns that converge with the Spanish population in positive indicators. In the midst of a labor market crisis, there is an increasing number of foreigners who remain in permanent employment.