2023/Q1 Article 19. The growth in permanent contracts and its potential impact on spending
Series: Economic Bulletin.
Author: Brindusa Anghel, Cristina Barceló and Ernesto Villanueva.
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Summary
Rationale
This article analyses what impact the increase in permanent contracts observed over the course of 2022 might have had on household spending.
Takeaways
- In 2019, workers on permanent contracts devoted 81% (on average) of their household income to spending, compared with 72% for those on temporary contracts.
- In the past, having their temporary contract converted to a permanent one has prompted households to increase their spending-to-income ratio by approximately 20% over the following two quarters.
- Based on those figures, the conversion of temporary to permanent contracts observed in 2022 could have increased the spending-to-income ratio by between 0.18 and 0.24 percentage points.