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Fixed-Term Contracts and the Duration Distribution of Unemployment

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  • Maia Güell

Abstract

In the mid-1980s, many European countries introduced fixed-term contracts. Since then their labor markets have become more dynamic. This paper studies the implications of such reforms for the duration distribution of unemployment, with particular emphasis on the changes in the duration dependence. I estimate a parametric duration model using cross-sectional data drawn from the Spanish Labor Force Survey from 1980 to 1994 to analyze the chances of leaving unemployment before and after the introduction of fixed-term contracts. I find that duration dependence has increased since such reform. Semi-parametric estimation of the model also shows that for long spells, the probability of leaving unemployment has decreased since such reform.

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Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0505.

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Date of creation: May 2001
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Handle: RePEc:cep:cepdps:dp0505

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Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

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Keywords: cross-sectional data; duration model; turnover;

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  1. Wadsworth, J., 1989. "Unemployment Benefits And Search Effort In The Uk Labour Market," Papers 333, London School of Economics - Centre for Labour Economics.
  2. Alfonso Alba-Ramirez, 1999. "Explaining the transitions out of unemployment in Spain: the effect of unemployment insurance," Applied Economics, Taylor & Francis Journals, vol. 31(2), pages 183-193.
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  4. Blanchard, Olivier Jean & Diamond, Peter A, 1994. "Ranking, Unemployment Duration, and Wages," Review of Economic Studies, Wiley Blackwell, vol. 61(3), pages 417-34, July.
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  10. Berg, Gerard J. van den & Klaauw, Bas van der, 1998. "Combining micro and macro unemployment data," Serie Research Memoranda 0041, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  11. Victor Aguirregabiria & Cesar Alonso-Borrego, 2009. "Labor contracts and flexibility : evidence from a labor market reform in Spain," Economics Working Papers we091811, Universidad Carlos III, Departamento de Economía.
  12. Maia Güell, 2000. "Fixed-Term Contracts and Unemployment: An Efficiency Wage Analysis," CEP Discussion Papers dp0461, Centre for Economic Performance, LSE.
  13. Maia Güell & Barbara Petrongolo, 2000. "Workers Transitions from Temporary to Permanent Employment: the Spanish Case," CEP Discussion Papers dp0438, Centre for Economic Performance, LSE.
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  15. Stephen P. Jenkins & Carlos García-Serrano, 2000. "Re-Employment Probabilities for Spanish Men: What Role Does the Unemployment Benefit System Play?," Discussion Papers of DIW Berlin 216, DIW Berlin, German Institute for Economic Research.
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Citations

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Cited by:
  1. Güell, Maia & Hu, Luojia, 2003. "Estimating the Probability of Leaving Unemployment Using Uncompleted Spells from Repeated Cross-Section Data," CEPR Discussion Papers 3957, C.E.P.R. Discussion Papers.
  2. Garrouste, Christelle & Kozovska, Kornelia & Arjona Perez, Elena, 2010. "Education and Long-Term Unemployment," MPRA Paper 25073, University Library of Munich, Germany.
  3. Chung, Heejung, 2005. "Different paths towards Flexibility, Deregulated employment protection or temporary employment?," MPRA Paper 2396, University Library of Munich, Germany, revised Oct 2005.
  4. J. García-Pérez & Fernando Muñoz-Bullón, 2004. "Are Temporary Help Agencies changing mobility patterns in the Spanish labour market?," Spanish Economic Review, Springer, vol. 7(1), pages 43-65, January.
  5. cipollone piero & Anita Guelfi, 2003. "tax credit policy and firms' behaviour: the case of subsidy to open-end labour contract in italy," Temi di discussione (Economic working papers) 471, Bank of Italy, Economic Research and International Relations Area.
  6. Bukowski, Maciej & Lewandowski, Piotr & Koloch, Grzegorz & Baranowska, Anna & Magda, Iga & Szydlowski, Arkadiusz & Bober, Magda & Bieliński, Jacek & Zawistowski, Julian & Sarzalska, Malgorzata, 2008. "Employment in Poland 2007: Security on flexible labour market," MPRA Paper 14284, University Library of Munich, Germany.
  7. Dario Sciulli, 2006. "Making the Italian Labor Market More Flexible: An Evaluation of the Treu Reform," Economics Working Papers we063408, Universidad Carlos III, Departamento de Economía.
  8. Edoardo Di Porto & Leandro Elia & Cristina Tealdi, 2013. "The "emersion" effect: an ex post and ex ante social program evaluation on labor tax evasion in Italy," Working Papers 2/2013, IMT Institute for Advanced Studies Lucca, revised Jun 2013.

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