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The Perverse Effects of Partial Labour Market Reform: fixed--Term Contracts in France

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Author Info
O Blanchard
A Landier

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Abstract

We argue that the effects of a partial reform of employment protection by allowing firms to hire workers on fixed--term contracts may be perverse. The main effect may be high turnover in entry--level jobs, leading to higher, not lower, unemployment. Even if unemployment falls, workers may be worse off, going through many spells of unemployment and entry--level jobs, before obtaining a regular job. Considering French data for young workers since the early 1980s, we conclude that the reforms have substantially increased turnover, without a substantial reduction in unemployment duration. If anything, the effect on their welfare appears to have been negative. Copyright 2002 Royal Economic Society

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Article provided by Royal Economic Society in its journal The Economic Journal.

Volume (Year): 112 (2002)
Issue (Month): 480 (June)
Pages: F214-F244
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Handle: RePEc:ecj:econjl:v:112:y:2002:i:480:p:f214-f244

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Cahuc, Pierre & Postel-Vinay, Fabien, 2002. "Temporary jobs, employment protection and labor market performance," Labour Economics, Elsevier, vol. 9(1), pages 63-91, February. [Downloadable!] (restricted)
  2. Lazear, Edward P, 1990. "Job Security Provisions and Employment," The Quarterly Journal of Economics, MIT Press, vol. 105(3), pages 699-726, August. [Downloadable!] (restricted)
  3. Ricardo J. Caballero & Mohamad L. Hammour, 1996. "The "Fundamental Transformation" in Macroeconomics," NBER Working Papers 5471, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  4. Thierry Magnac & Michael Visser, 1999. "Transition Models With Measurement Errors," The Review of Economics and Statistics, MIT Press, vol. 81(3), pages 466-474, August. [Downloadable!] (restricted)
    Other versions:
  5. P Adam & P Canziani, 1998. "Partial De-Regulation: Fixed-Term Contracts in Italy and Spain," CEP Discussion Papers 0386, Centre for Economic Performance, LSE.
  6. Saint-Paul, G., 1993. "On the Political Economy of Labor Market Flexibility," DELTA Working Papers 93-02, DELTA (Ecole normale supérieure).
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  7. Olivier Blanchard & Pedro Portugal, 1998. "What Hides Behind an Umemployment Rate: Comparing Portuguese and U.S. Unemployment," NBER Working Papers 6636, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  8. Fougère, Denis & Kramarz, Francis & Magnac, Thierry, 2000. "Youth Employment Policies In France," CEPR Discussion Papers 2394, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  9. M Guell-Rotllan & B Petrongolo, 2000. "Workers' Transitions from Temporary to Permanent Employment: the Spanish Case," CEP Discussion Papers 0438, Centre for Economic Performance, LSE.
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. José Ignacio García Pérez & Yolanda Rebollo Sanz, 2005. "The use of permanent and temporary jobs across Spanish regions: Do unit labour cost differentials offer an explanation?," Economic Working Papers at Centro de Estudios Andaluces E2005/16, Centro de Estudios Andaluces. [Downloadable!]
    Other versions:
  2. David Autor & Susan Houseman, 2005. "Do Temporary Help Jobs Improve Labor Market Outcomes
    for Low-Skilled Workers? Evidence from Random Assignments    ," Staff Working Papers 05-124, W.E. Upjohn Institute for Employment Research. [Downloadable!] (restricted)
  3. Hector Sala & José I. Silva, 2005. "The Relevance of Post-Match LTC: Why Has the Spanish Labor Market Become as Volatile as the US One?," IZA Discussion Papers 1823, Institute for the Study of Labor (IZA). [Downloadable!]
  4. Petrongolo, Barbara, 2004. "Gender Segregation in Employment Contracts," CEPR Discussion Papers 4303, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  5. repec:ese:iserwp: is not listed on IDEAS
  6. Alison L. Booth & Marco Francesconi & Jeff Frank, 2002. "Temporary Jobs: Stepping Stones Or Dead Ends?," Economic Journal, Royal Economic Society, vol. 112(480), pages F189-F213, June. [Downloadable!] (restricted)
    Other versions:
  7. Engellandt, Axel & Riphahn, Regina, 2004. "Temporary Contracts and Employee Effort," CEPR Discussion Papers 4178, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  8. B. Dormont & M. Pauchet, 2003. "Uncertainty and Recourse to Short-Term Contracts," THEMA Working Papers 2003-35, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise. [Downloadable!]
  9. Arulampalam, Wiji & Booth, Alison L. & Bryan, Mark L., 2003. "Training in Europe," IZA Discussion Papers 933, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  10. Pierre, Gaelle & Scarpetta, Stefano, 2004. "Employment regulations through the eyes of employers - do they matter and how do firms respond to them?," Policy Research Working Paper Series 3463, The World Bank. [Downloadable!]
    Other versions:
  11. David H. Autor & Susan Houseman, 2005. "Do Temporary Help Jobs Improve Labor Market Outcomes for Low-Skilled Workers? Evidence from 'Work First'," NBER Working Papers 11743, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  12. Lawrence M. Kahn, 2005. "The Impact of Employment Protection Mandates on Demographic Temporary Employment Patterns: International Microeconomic Evidence," IZA Discussion Papers 1548, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  13. Marloes de Graaf-Zijl, 2005. "Compensation of On-call and Fixed-term Employment: the Role of Uncertainty," Tinbergen Institute Discussion Papers 05-120/3, Tinbergen Institute. [Downloadable!]
  14. Hector Sala Lorda, 2005. "The relevance of Post-Match LTC: Why has the Spanish labor market become as volatile as the US one?," Working Papers wpdea0515, Department of Applied Economics at Universitat Autonoma of Barcelona. [Downloadable!]
  15. Gene Tunny & John Mangan, 2003. "Stepping stones to permanent employment with particular reference to the Queensland public service," Working Papers 000151, Lancaster University Management School, Economics Department. [Downloadable!]
  16. Marloes de Graaf-Zijl, 2005. "The Attractiveness of Temporary Employment to Reduce Adjustment Costs," Tinbergen Institute Discussion Papers 05-121/3, Tinbergen Institute. [Downloadable!]
  17. B Petrongolo, 2004. "Gender Segregation in Employment Contracts," CEP Discussion Papers dp0637, Centre for Economic Performance, LSE. [Downloadable!]
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