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Short-term contracts: trap or stepping stone toward stable employment?

  • P. GIVORD

    (Insee)

  • L. WILNER

    (Crest)

This paper focuses on labor market transitions and especially on those involving fixed-term contracts. Our contribution is twofold: first, we provide an accurate measure of labor market transitions and focus on transitions from fixed-term contracts to open-ended contracts or unemployment (dealing with the "stepping-stone or dead-end" question) ; second, we analyze the potential incentive effect of fixed-term contracts on effort. To deal with unobserved heterogeneity, we use a dynamic multinomial logit with fixed effects. We estimate the model on the French Labor Force Survey (2002-2008) which provides detailed information on quarterly transitions. We construct an indicator of effort for fixed-term workers based on a compared weekly working time. We find that fixed-term contracts provide slightly better perspectives than unemployment. However, we don't find evidence of any significant impact of working more on the probability of getting an open-ended contract.

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File URL: http://www.insee.fr/fr/publications-et-services/docs_doc_travail/G2009-04.pdf
File Function: Document de travail de la DESE numéro G2009-04
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Paper provided by Institut National de la Statistique et des Etudes Economiques, DESE in its series Documents de Travail de la DESE - Working Papers of the DESE with number g2009-04.

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Date of creation: 2009
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Handle: RePEc:crs:wpdeee:g2009-04
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  16. Martin Browning & Jesus Carro, 2006. "Heterogeneity in dynamic discrete choice models," Economics Series Working Papers 287, University of Oxford, Department of Economics.
  17. Magnac, Thierry, 2000. "Subsidised Training and Youth Employment: Distinguishing Unobserved Heterogeneity from State Dependence in Labour Market Histories," Economic Journal, Royal Economic Society, vol. 110(466), pages 805-37, October.
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