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The Impact of Temporary Contracts on Gross Job and Worker Flows




Based on direct information on hires and separations for 11.000 establishments during 11 years, we report new evidence that around half of job and worker flows stem from temporary contracts which account for only around 10 percent of employment. The share of temporary contracts is positively correlated to employment growth indicating that firms use temporary jobs as a buffer in labor adjustment. Job reallocation for temporary contracts is acyclical. Service establishments with a high share of temporary employment exhibit acyclical job reallocation while permanent jobs in manufacturing are countercyclical.

Suggested Citation

  • Heyman, Fredrik & Arai, Mahmood, 2002. "The Impact of Temporary Contracts on Gross Job and Worker Flows," SSE/EFI Working Paper Series in Economics and Finance 0494, Stockholm School of Economics.
  • Handle: RePEc:hhs:hastef:0494

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    References listed on IDEAS

    1. Lawrence M. Ausubel & Raymond J. Deneckere, 1987. "One is Almost Enough for Monopoly," RAND Journal of Economics, The RAND Corporation, vol. 18(2), pages 255-274, Summer.
    2. Faruk Gul, 1987. "Noncooperative Collusion in Durable Goods Oligopoly," RAND Journal of Economics, The RAND Corporation, vol. 18(2), pages 248-254, Summer.
    3. Kirman, Alan P & Sobel, Matthew J, 1974. "Dynamic Oligopoly with Inventories," Econometrica, Econometric Society, vol. 42(2), pages 279-287, March.
    4. Dutta Prajit K., 1995. "A Folk Theorem for Stochastic Games," Journal of Economic Theory, Elsevier, vol. 66(1), pages 1-32, June.
    5. Gul, Faruk & Sonnenschein, Hugo & Wilson, Robert, 1986. "Foundations of dynamic monopoly and the coase conjecture," Journal of Economic Theory, Elsevier, vol. 39(1), pages 155-190, June.
    6. Coase, Ronald H, 1972. "Durability and Monopoly," Journal of Law and Economics, University of Chicago Press, vol. 15(1), pages 143-149, April.
    7. Eric Maskin & Jean Tirole, 1985. "A Theory of Dynamic Oligopoly, II: Price Competition," Working papers 373, Massachusetts Institute of Technology (MIT), Department of Economics.
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    Cited by:

    1. repec:ebl:ecbull:v:10:y:2004:i:4:p:1-6 is not listed on IDEAS
    2. Holmlund, Bertil, 2003. "The Rise and Fall of Swedish Unemployment," Working Paper Series 2003:13, Uppsala University, Department of Economics.
    3. Mahmood Arai & Fredrik Heyman, 2004. "Temporary contracts and the dynamics of job turnover," Economics Bulletin, AccessEcon, vol. 10(4), pages 1-6.

    More about this item


    Job Creation and Job Destruction; Worker Flows; Dual Labor Markets; Temporary Employment.;

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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