IESET.
Hypotheses·labour·labour_reform_spain_2012_dismissal_cost_employment

Spain's February 2012 labour reform (Real Decreto-Ley 3/2012: dismissal-cost reduction from 45 to 33 days/year, decentralised collective bargaining, "objective causes" expansion) shortened the duration of the post-2011 unemployment surge by accelerating hiring rates 2014-2017 by at least 1.5 pp relative to a synthetic control of euro-area peripheral peers, without producing a permanent reduction in real wages relative to donors.

PARTIALengine/runs/labour_reform_spain_2012_dismissal_cost_employment

PARTIAL — mean_gap=+10.36, |gap|/pre_sd=1.8, p_perm=0.286; claim direction ambiguous

confidence cueThe result is useful, but not decisive. Treat it as a clue, not a settled conclusion.

policy briefMixed or noisy

In ordinary language

In plain terms, this asks whether spain 2012 reform is actually linked to better or worse unemployment rate from 2005 to 2018.

plain answer

The evidence is suggestive but not decisive. mean_gap=+10.36, |gap|/pre_sd=1.8, p_perm=0.286; claim direction ambiguous

why it matters

Labor-market rules often help some workers while risking job loss or slower hiring for others. This test looks for that tradeoff in observable employment or unemployment data.

how the test works

It compares 7 country or place units from 2005 to 2018, using a synth did design, with fixed effects for country and year.

what was measured
What changed
  • Spain 2012 reform
What we checked
  • Unemployment rate
  • Hiring rate quarterly
  • Real wage index
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

No evidence packet has been generated yet.

Results

engine/runs/labour_reform_spain_2012_dismissal_cost_employment
1007550250200520122018ESPITAPRTGRCIRLFRADEU
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show unemployment_rate across 7 sampled countries over 2005–2018.
The shapes above are stylised — none of the lines are real data.
Placeholder for labour_reform_spain_2012_dismissal_cost_employment. Published chart will be generated from engine/runs/labour_reform_spain_2012_dismissal_cost_employment/chart_data.json.

Pre-registration

registration ordering unverified
first-spec commit 4c8ce8e · 2026-07-18T22:11:21Z
run generated · 2026-04-30T10:15:31Z
Run timestamp predates this path's first git-add commit (rebase, rename, or pre-git local run). Spec hash is still the path's first-add commit — not repository HEAD — but ordering is not a clean pre-registration proof.

Spain's February 2012 labour reform (Real Decreto-Ley 3/2012: dismissal-cost reduction from 45 to 33 days/year, decentralised collective bargaining, "objective causes" expansion) shortened the duration of the post-2011 unemployment surge by accelerating hiring rates 2014-2017 by at least 1.5 pp relative to a synthetic control of euro-area peripheral peers, without producing a permanent reduction in real wages relative to donors.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

SUPPORTED if synth-DiD gap on hiring rate > +1.5 pp by 2017 AND real-wage-index gap is not statistically more negative than -2.0 pp at p<0.10. REFUTED if hiring-rate gap is insignificant OR real-wage gap < -2.0 pp at p<0.10 (wage suppression channel dominant). PARTIAL if both conditions are met but with shrinking magnitude.

formal test & threshold
test:      Synth-DiD on Spanish hiring rate and real-wage index 2012-2017 vs euro-area peripheral donor pool with placebo permutation inference at p<0.10.

Method

Template
synth_did
Fixed effects
country, year
Clustering
country
Sample
7 countries · 2005 – 2018
Evidence type
associational

Data

VariableSourceTransform
unemployment_rate
outcome
world_bank_wdi:SL.UEM.TOTL.ZStier 2
level
hiring_rate_quarterly
outcome
eurostat:lfsi_emp_qtier 1
level
real_wage_index
outcome
oecd:DSD_EARNtier 2
log
spain_2012_reform
treatment
constructed:indicator for 2012-Q1 RDL 3/2012 enactmenttier 5
indicator
gdp_per_capita_real
control
world_bank_wdi:NY.GDP.PCAP.KDtier 2
log
ecb_policy_rate
control
ecb:FMtier 1
level
government_consumption_share
control
world_bank_wdi:NE.CON.GOVT.ZStier 2
level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — labour_reform_spain_2012_dismissal_cost_employment

Verdict: PARTIAL — mean_gap=+10.36, |gap|/pre_sd=1.8, p_perm=0.286; claim direction ambiguous

Pre-registration

  • Claim: Spain's February 2012 labour reform (Real Decreto-Ley 3/2012: dismissal-cost reduction from 45 to 33 days/year, decentralised collective bargaining, "objective causes" expansion) shortened the duration of the post-2011 unemployment surge by accelerating hiring rates 2014-2017 by at least 1.5 pp relative to a synthetic control of euro-area peripheral peers, without producing a permanent reduction in real wages relative to donors.
  • Falsification rule: SUPPORTED if synth-DiD gap on hiring rate > +1.5 pp by 2017 AND real-wage-index gap is not statistically more negative than -2.0 pp at p<0.10. REFUTED if hiring-rate gap is insignificant OR real-wage gap < -2.0 pp at p<0.10 (wage suppression channel dominant). PARTIAL if both conditions are met but with shrinking magnitude.

Synthetic-control estimate

  • shape: synth_did
  • treated_country: ESP
  • event_year: 2012
  • n_donors: 6
  • donor_weights (top): {'IRL': 0.6483, 'ITA': 0.3288, 'GRC': 0.0229, 'PRT': 0.0, 'FRA': 0.0}
  • pre_rmse: 5.636043015509205
  • pre_period_sd: 5.751994026919212
  • mean_post_gap: 10.361486807577771
  • end_period_gap: 7.628561559150377
  • post_period_years: [2012, 2018]
  • placebo_p_value: 0.2857142857142857
  • n_placebos: 6
  • method: synthetic-control via NNLS, permutation inference

Variables resolved

  • world_bank_wdi:SL.UEM.TOTL.ZS → unemployment_rate (outcome, n=8106)
  • world_bank_wdi:NY.GDP.PCAP.KD → gdp_per_capita_real (controls, n=14131)

Generated by scripts/run_synth_did.py at 2026-04-30T10:15:31+00:00

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Notes

Treatment dated 2012-Q1. Spain's case is unusually contested because the reform was followed by a sharp rise in unemployment through 2013 before reversing — making a naive pre-post test flat-out misleading. The synthetic-DiD design with a peer donor pool absorbs the common austerity shock and isolates the relative labour-flow gain.

Authored framework. Read the transparency note.