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Labor market flexibility and poverty dynamics

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Author Info

  • Amuedo-Dorantes, Catalina
  • Serrano-Padial, Ricardo

Abstract

The past two decades have witnessed a rapid growth in flexible work arrangements that, in some instances, could expose workers to a higher poverty risk via limited job stability, few advancement opportunities, and low wages. Nowhere in the world has this increase in flexible work arrangements being more evident than in Spain, where about a third of the wage and salary workforce holds fixed-term contracts. Using Spanish panel data and maximum-likelihood binary models that account for state dependence and unobserved heterogeneity, we examine the poverty implications of past and present temporary employment. Our findings suggest that fixed-term contracts are linked to a greater poverty exposure among women and older men relative to open-ended contracts. Furthermore, this greater poverty exposure can last several years due to feedback effects operating via job instability or via the transition to work statuses characterized by higher poverty hazards. Finally, the adverse impact of temporary employment is linked to the short duration of some contracts, thus signaling the importance of work attachment.

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Bibliographic Info

Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 17 (2010)
Issue (Month): 4 (August)
Pages: 632-642

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Handle: RePEc:eee:labeco:v:17:y:2010:i:4:p:632-642

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Web page: http://www.elsevier.com/locate/labeco

Related research

Keywords: Temporary employment Poverty Fixed-term contracts Feedback effects State dependence Spain;

References

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  1. Mary Jo Bane & David T. Ellwood, 1986. "Slipping into and out of Poverty: The Dynamics of Spells," Journal of Human Resources, University of Wisconsin Press, vol. 21(1), pages 1-23.
  2. Juan F. Jimeno & Luis Toharia, 1993. "The effects of fixed-term employment on wages: theory and evidence from Spain," Investigaciones Economicas, Fundación SEPI, vol. 17(3), pages 475-494, September.
  3. Juan J Dolado & Carlos Garcia--Serrano & Juan F. Jimeno, 2002. "Drawing Lessons From The Boom Of Temporary Jobs In Spain," Economic Journal, Royal Economic Society, vol. 112(721), pages F270-F295, June.
  4. Stevens, Ann Huff, 1994. "The Dynamics of Poverty Spells: Updating Bane and Ellwood," American Economic Review, American Economic Association, vol. 84(2), pages 34-37, May.
  5. Carolyn J. Heinrich & Peter R. Mueser & Kenneth R. Troske, 2005. "Welfare to Temporary Work: Implications for Labor Market Outcomes," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 154-173, February.
  6. Hoynes, Hilary & MaCurdy, Thomas, 1994. "Has the Decline in Benefits Shortened Welfare Spells?," American Economic Review, American Economic Association, vol. 84(2), pages 43-48, May.
  7. Stewart, Mark, 2006. "The Inter-related Dynamics of Unemployment and Low-Wage Employment," The Warwick Economics Research Paper Series (TWERPS) 741, University of Warwick, Department of Economics.
  8. Alison L. Booth & Marco Francesconi & Jeff Frank, 2002. "Temporary Jobs: Stepping Stones or Dead Ends?," LABORatorio R. Revelli Working Papers Series 8, LABORatorio R. Revelli, Centre for Employment Studies.
  9. Lawrence Katz & Alan Krueger, 1999. "The High-pressure U.S. Labor Market of the 1990s," Working Papers 795, Princeton University, Department of Economics, Industrial Relations Section..
  10. Gene Tunny & John Mangan, 2004. "Stepping Stones to Permanent Employment in the Public Service," LABOUR, CEIS, vol. 18(4), pages 591-614, December.
  11. Arellano, M & Carrasco, R, 1996. "Binary Choice Panel Data Models with Predetermined Variables," Papers 9618, Centro de Estudios Monetarios Y Financieros-.
  12. Gottschalk, Peter & Moffitt, Robert A, 1994. "Welfare Dependence: Concepts, Measures, and Trends," American Economic Review, American Economic Association, vol. 84(2), pages 38-42, May.
  13. Olga Canto, 2002. "Climbing out of poverty, falling back in: low income stability in Spain," Applied Economics, Taylor & Francis Journals, vol. 34(15), pages 1903-1916.
  14. Marieka Klawitter & Robert D. Plotnick & Mark Evan Edwards, 2000. "Determinants of initial entry onto welfare by young women," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 19(4), pages 527-546.
  15. Wooldridge, Jeffrey M., 2000. "A framework for estimating dynamic, unobserved effects panel data models with possible feedback to future explanatory variables," Economics Letters, Elsevier, vol. 68(3), pages 245-250, September.
  16. Carolyn J. Heinrich, 2005. "Temporary Employment Experiences of Women on Welfare," Journal of Labor Research, Transaction Publishers, vol. 26(2), pages 335-350, January.
  17. Greg Duncan & Johanne Boisjoly & Timothy Smeeding, 1996. "Economic mobility of young workers in the 1970s and 1980s," Demography, Springer, vol. 33(4), pages 497-509, November.
  18. Ambra Poggi, 2003. "Does persistence of social exclusion exist in Spain?," Working Papers wpdea0308, Department of Applied Economics at Universitat Autonoma of Barcelona.
  19. Robert Plotnick, 1983. "Turnover in the AFDC Population: An Event History Analysis," Journal of Human Resources, University of Wisconsin Press, vol. 18(1), pages 65-81.
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Citations

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Cited by:
  1. Modena, Francesca & Sabatini, Fabio, 2010. "I Would if I Could: Precarious Employment and Childbearing Intentions in Italy," MPRA Paper 26117, University Library of Munich, Germany.
  2. Liana Son & Gratiela Georgiana Carica, 2011. "Labour Market Policies in Selected EU Member States: A Comparative and Impact Analysis," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 14(39), pages 151-173, March.
  3. Francesca Modena & Concetta Rondinelli & Fabio Sabatini, 2012. "Economic insecurity and fertility intentions: the case of Italy," EERI Research Paper Series EERI_RP_2012_18, Economics and Econometrics Research Institute (EERI), Brussels.

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