IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

The Welfare Cost of Business Cycles in an Economy with Nonclearing Markets

  • Elena Casquel
  • Antoni Cunyat

This paper analyzes thes dynamics of temporary jobs in a labor market characterized by worker's skill heterogeneity and employment protection. We construct a theoretical labor market that incorporates skill differences across workers in order to identify under which conditions temporary contracts are a way for workers to access to permanent contracts (stepping stone effect) or they are dead-end jobs without any good prospect (trap effect). We use longitudinal survey data of individuals to estimate competing risks model with multi-spells for Spain. To deal with selectivity, the model incorporates correlated unobserved determinants in the tranansition rates. Our results show the existence of two opposite dynamics of temporary contracts for skilled and unskilled workers: whereas for skilled workers temporary contracts serve as a stepping stone, unskilled workers seem to experiment a penalty, that is, they get "stuck" in temporary contracts. More importantly, controlling for unobserved heterogeneity is quite important in order to obtain clear estimates.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://documentos.fedea.net/pubs/dt/2005/dt-2005-19.pdf
Download Restriction: no

Paper provided by FEDEA in its series Working Papers with number 2005-19.

as
in new window

Length:
Date of creation:
Date of revision:
Handle: RePEc:fda:fdaddt:2005-19
Contact details of provider: Web page: http://www.fedea.net

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Han, Aaron & Hausman, Jerry A, 1990. "Flexible Parametric Estimation of Duration and Competing Risk Models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 5(1), pages 1-28, January-M.
  2. Etienne Wasmer, 1997. "Competition for Jobs in a Growing Economy and the Emergence of Dualism," Working Papers 97-15, Centre de Recherche en Economie et Statistique.
  3. Gerard J. van den Berg & Anders Holm & Jan C. van Ours, 2002. "Do stepping-stone jobs exist? Early career paths in the medical profession," Journal of Population Economics, Springer, vol. 15(4), pages 647-665.
  4. Meyer, Bruce D, 1990. "Unemployment Insurance and Unemployment Spells," Econometrica, Econometric Society, vol. 58(4), pages 757-82, July.
  5. Jan C. van Ours, 2002. "The Locking-in Effect of Subsidized Jobs," William Davidson Institute Working Papers Series 474, William Davidson Institute at the University of Michigan.
  6. Costas Meghir & Edward Whitehouse, 1993. "Labour market transitions and retirement of men in the UK," IFS Working Papers W93/12, Institute for Fiscal Studies.
  7. Maia Güell & Barbara Petrongolo, 2003. "How binding are legal limits? Transitions from temporary to permanent work in Spain," Economics Working Papers 682, Department of Economics and Business, Universitat Pompeu Fabra, revised Jul 2005.
  8. Van den Berg, Gerard J., 2000. "Duration Models: Specification, Identification, and Multiple Durations," MPRA Paper 9446, University Library of Munich, Germany.
  9. Zijl, Marloes & van den Berg, Gerard J. & Heyma, Arjan, 2004. "Stepping Stones for the Unemployed: The Effect of Temporary Jobs on the Duration until Regular Work," IZA Discussion Papers 1241, Institute for the Study of Labor (IZA).
  10. van Ours, J.C., 2004. "The locking-in effect of subsidized jobs," Other publications TiSEM c4fd99a1-4c2f-46c6-9ee2-3, Tilburg University, School of Economics and Management.
  11. Dolado, Juan J. & Garcia-Serrano, Carlos & Jimeno, Juan F, 2001. "Drawing Lessons From the Boom of Temporary Jobs in Spain," CEPR Discussion Papers 2884, C.E.P.R. Discussion Papers.
  12. Alison L. Booth & Marco Francesconi & Jeff Frank, 2002. "Temporary Jobs: Stepping Stones Or Dead Ends?," Economic Journal, Royal Economic Society, vol. 112(480), pages F189-F213, June.
  13. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March.
  14. Honore, Bo E, 1993. "Identification Results for Duration Models with Multiple Spells," Review of Economic Studies, Wiley Blackwell, vol. 60(1), pages 241-46, January.
  15. repec:ner:tilbur:urn:nbn:nl:ui:12-140882 is not listed on IDEAS
  16. Olivier Blanchard & Augustin Landier, 2001. "The Perverse Effects of Partial Labor Market Reform: Fixed Duration Contracts in France," NBER Working Papers 8219, National Bureau of Economic Research, Inc.
  17. Jaap H. Abbring & Gerard J. van den Berg, 2003. "The identifiability of the mixed proportional hazards competing risks model," Journal of the Royal Statistical Society Series B, Royal Statistical Society, vol. 65(3), pages 701-710.
  18. D'Addio, Anna Cristina & Rosholm, Michael, 2005. "Exits from temporary jobs in Europe: A competing risks analysis," Labour Economics, Elsevier, vol. 12(4), pages 449-468, August.
  19. Jolivet, Gregory & Postel-Vinay, Fabien & Robin, Jean-Marc, 2006. "The empirical content of the job search model: Labor mobility and wage distributions in Europe and the US," European Economic Review, Elsevier, vol. 50(4), pages 877-907, May.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:fda:fdaddt:2005-19. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Carmen Arias)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.