To Reduce Unemployment, Simplify Contracts

IESE Prof. Antonio Argandoña on Spain's Unemployment Problem


Spain's current unemployment rate of 21 percent is too much for any country to endure, due to the "economic, social, political and human consequences" it will bring about, particularly for young people, says IESE Prof. Antonio Argandoña.

And since the problem is fundamentally a structural one, the end of the recession will not necessarily signal an end to high unemployment in Spain. Instead, the country should focus on simplifying contracts and find ways to reduce the number of temporary contracts that companies are inclined to offer. Fewer than 8 percent of short-term contracts are converted to long-term contracts, Argandoña says, which is a major problem for aspiring young professionals and the Spanish economy in general.