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

Author

Listed:
  • 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.

Suggested Citation

  • Marcela Eslava & John Haltiwanger & Adriana Kugler & Maurice Kugler, 2014. "The Effects of Regulations and Business Cycles on Temporary Contracts, the Organization of Firms and Productivity," CEDLAS, Working Papers 0154, CEDLAS, Universidad Nacional de La Plata.
  • Handle: RePEc:dls:wpaper:0154
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    File URL: http://www.cedlas.econo.unlp.edu.ar/wp/wp-content/uploads/doc_cedlas154.pdf
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    References listed on IDEAS

    as
    1. Kugler, Adriana D., 2005. "Wage-shifting effects of severance payments savings accounts in Colombia," Journal of Public Economics, Elsevier, pages 487-500.
    2. Adriana Kugler & Juan F. Jimeno & Virginia Hernanz, "undated". "Employment Consequences of Restrictive Permanent Contracts: Evidence from Spanish Labor Market Reforms," Working Papers 2003-14, FEDEA.
    3. Dolado, Juan J. & Stucchi, Rodolfo, 2008. "Do Temporary Contracts Affect TFP? Evidence from Spanish Manufacturing Firms," CEPR Discussion Papers 7055, C.E.P.R. Discussion Papers.
    4. Marcela Eslava & John Haltiwanger & Adriana Kugler & Maurice Kugler, 2010. "Factor Adjustments after Deregulation: Panel Evidence from Colombian Plants," The Review of Economics and Statistics, MIT Press, vol. 92(2), pages 378-391, May.
    5. Eslava, Marcela & Haltiwanger, John & Kugler, Adriana & Kugler, Maurice, 2004. "The effects of structural reforms on productivity and profitability enhancing reallocation: evidence from Colombia," Journal of Development Economics, Elsevier, vol. 75(2), pages 333-371, December.
    6. William Kerr & Adriana Kugler & David Autor, 2007. "Do Employment Protections Reduce Productivity? Evidence from U.S. States," Working Papers 07-04, Center for Economic Studies, U.S. Census Bureau.
    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, January.
    8. Maurice Kugler & John Haltiwanger & Adriana Kugler & Marcela Eslava, 2009. "Trade Reforms and Market Selection: Evidence from Manufacturing Plants in Colombia," 2009 Meeting Papers 615, Society for Economic Dynamics.
    9. Samuel Bentolila & Giuseppe Bertola, 1990. "Firing Costs and Labour Demand: How Bad is Eurosclerosis?," Review of Economic Studies, Oxford University Press, vol. 57(3), pages 381-402.
    10. 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 270-295, June.
    11. 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 1-3.
    12. 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, June.
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