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The Effects of Regulations and Business Cycles on Temporary Contracts, the Organization of Firms and Productivity

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  • Marcela Eslava

    (Universidad de Los Andes)

  • John Haltiwanger

    (University of Maryland and NBER)

  • Adriana Kugler

    (Georgetown University, NBER, and Department of Labor.)

  • Maurice Kugler

    (UNDP)

Abstract

We assess the impact, on workforce contract composition, employment adjustment dynamics and productivity, of a combination of changes in the Colombian labor legislation which increased firm’s ability of using contracts of a temporary nature, and posterior changes that increased the costs associated with longer term contracts. Until 1990, labor regulations in Colombia practically banned the possibility of using fixed-term contracts for horizons of less than one year (see, e.g. Kugler, 2004). The labor market component of a broad package of market reforms adopted at the beginning of the nineties opened the possibility of hiring under fixed term contracts of different types. Some of these contracts not only free employers of potential dismissal costs, but are also subject to reduced, or even zero, non-wage costs. Regulatory changes occurred in the decade that followed further increased incentives to use fixed term contracts.

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Bibliographic Info

Paper provided by CEDLAS, Universidad Nacional de La Plata in its series CEDLAS, Working Papers with number 0154.

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Length: 51 pages
Date of creation: Feb 2014
Date of revision:
Handle: RePEc:dls:wpaper:0154

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  1. Autor, David & Kerr, William & Kugler, Adriana, 2007. "Do Employment Protections Reduce Productivity? Evidence from U.S. States," IZA Discussion Papers 2571, Institute for the Study of Labor (IZA).
  2. Juan José Dolado & Carlos García-Serrano & Juan F. Jimeno, . "Drawing Lessons from the Boom of Temporary Jobs in Spain," Working Papers 2001-11, FEDEA.
  3. Kugler, Adriana & Jimeno, Juan F. & Hernanz, Virginia, 2002. "Employment Consequences of Restrictive Permanent Contracts: Evidence from Spanish Labor Market Reforms," IZA Discussion Papers 657, Institute for the Study of Labor (IZA).
  4. Eslava, Marcela & Haltiwanger Jr, John C & Kugler, Adriana D. & Kugler, Maurice, 2004. "The Effects of Structural Reforms on Productivity- and Profitability-Enhancing Reallocation: Evidence from Colombia," CEPR Discussion Papers 4569, C.E.P.R. Discussion Papers.
  5. Marcela Eslava & John Haltiwanger & Adriana Kugler & Maurice Kugler, 2005. "Factor Adjustments After Deregulation: Panel Evidence from Colombian Plants," NBER Working Papers 11656, National Bureau of Economic Research, Inc.
  6. Dolado, Juan J. & Stucchi, Rodolfo, 2008. "Do Temporary Contracts Affect TFP? Evidence from Spanish Manufacturing Firms," IZA Discussion Papers 3832, Institute for the Study of Labor (IZA).
  7. Adriana Kugler & Maurice Kugler, 2009. "Labor Market Effects of Payroll Taxes in Developing Countries: Evidence from Colombia," Economic Development and Cultural Change, University of Chicago Press, vol. 57(2), pages 335-358, 01.
  8. David H. Autor & William R. Kerr & Adriana D. Kugler, 2007. "Does Employment Protection Reduce Productivity? Evidence From US States," Economic Journal, Royal Economic Society, vol. 117(521), pages 189-217, 06.
  9. Bentolila, Samuel & Bertola, Giuseppe, 1990. "Firing Costs and Labour Demand: How Bad Is Eurosclerosis?," Review of Economic Studies, Wiley Blackwell, vol. 57(3), pages 381-402, July.
  10. Marcela Eslava & John Haltiwanger & Adriana Kugler & Maurice Kugler, 2006. "Plant Turnover and Structural Reforms in Colombia," IMF Staff Papers, Palgrave Macmillan, vol. 53(si), pages 3.
  11. Kugler, Adriana D., 2005. "Wage-shifting effects of severance payments savings accounts in Colombia," Journal of Public Economics, Elsevier, vol. 89(2-3), pages 487-500, February.
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