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Which firms create fixed-term employment? Evidence from Portugal

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  • Damas de Matos, Ana
  • Parent, Daniel

Abstract

We study net job creation in Portugal using matched employer-employee data with information on both contract type and firm age. Young firms, particularly startups, are an important source of job creation and that creation occurs in large part through fixed-term contracts. In contrast, most job destruction is due to small older firms that tend to use open-ended contracts. We also find that the share of fixed-term contracts increased substantially between 2002 and 2007 and that this increase was driven mainly by each successive cohort of startups. The severely deteriorating business climate in Portugal starting in the early 2000s coincides with the increased use of fixed-term contracts by firms. Our findings suggest that job creation in Portugal operates similarly as in the U.S. (Haltiwanger et al., 2013).

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  • Damas de Matos, Ana & Parent, Daniel, 2016. "Which firms create fixed-term employment? Evidence from Portugal," Labour Economics, Elsevier, vol. 41(C), pages 348-362.
    • Handle: RePEc:eee:labeco:v:41:y:2016:i:c:p:348-362
    DOI: 10.1016/j.labeco.2016.05.027
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    Cited by:

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    2. Maria Giovanna Bosco & Elisa Valeriani, 2018. "The Road to Permanent Work in Italy: “It’s Getting Dark, Too Dark to See”," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 4(3), pages 385-419, November.
    3. Pedro S. Martins, 2016. "The third worker: Assessing the trade-off between employees and contractors," Working Papers 75, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
    4. Martins, Pedro S., 2021. "Should the maximum duration of fixed-term contracts increase in recessions? Evidence from a law reform," International Review of Law and Economics, Elsevier, vol. 68(C).
    5. Kristina Nyström, 2021. "Working for an entrepreneur: heaven or hell?," Small Business Economics, Springer, vol. 56(2), pages 919-931, February.
    6. A. Arrighetti & L. Cattani & F. Landini & A. Lasagni, 2019. "Work Flexibility and Firm Growth," Economics Department Working Papers 2019-EP04, Department of Economics, Parma University (Italy).
    7. Maria Giovanna Bosco & Elisa Valeriani, 2017. "From temporary to permanent jobs: a stepping stone analysis for Emilia Romagna," EcoMod2017 10474, EcoMod.
    8. Kanupriya Jain & Piyali Ghosh & Shankha Shuvra Misra, 2023. "The Future of Fixed-term Employment in India," Vikalpa: The Journal for Decision Makers, , vol. 48(2), pages 87-99, June.
    9. Kettunen, Jukka & Martikainen, Minna & Voulgaris, Georgios, 2021. "Employment policies in private loss firms: Return to profitability and the role of family CEOs," Journal of Business Research, Elsevier, vol. 135(C), pages 373-390.

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