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The Effect of Product Market Competition on Job Instability

Listed author(s):
  • Aparicio Fenoll, Ainhoa

    ()

    (Collegio Carlo Alberto)

This paper assesses the impact of product market competition on job instability as proxied by the use of fixed-term labor contracts. Using both worker data from the Spanish Labor Force Survey and firm data from the Spanish Business Strategies Survey, I show that job instability rises with competition. In particular, a one standard deviation increase in competition in an economic sector decreases the probability that a fixed-term worker gets an open-ended contract within that sector in a given year by more than 30%. The effect is identified by means of exogenous shifts in competition brought about by changes in legislation.

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File URL: http://ftp.iza.org/dp5669.pdf
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5669.

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Length: 74 pages
Date of creation: Apr 2011
Publication status: published in: Labour Economics, Volume 35, August 2015, Pages 145-159
Handle: RePEc:iza:izadps:dp5669
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  13. Michele Boldrin & Sergi Jiménez-Martín & Franco Peracchi, 2004. "Micro-Modeling of Retirement Behavior in Spain," NBER Chapters,in: Social Security Programs and Retirement around the World: Micro-Estimation, pages 499-578 National Bureau of Economic Research, Inc.
  14. cipollone piero & Anita Guelfi, 2003. "tax credit policy and firms' behaviour: the case of subsidy to open-end labour contract in italy," Temi di discussione (Economic working papers) 471, Bank of Italy, Economic Research and International Relations Area.
  15. Fredrik Heyman & Helena Svaleryd & Jonas Vlachos, 2013. "Competition, Takeovers, and Gender Discrimination," ILR Review, Cornell University, ILR School, vol. 66(2), pages 409-432, April.
  16. Joseph Tracy & Linda Goldberg & Stephanie Aaronson, 1999. "Exchange Rates and Employment Instability: Evidence from Matched CPS Data," American Economic Review, American Economic Association, vol. 89(2), pages 204-210, May.
  17. O Blanchard & A Landier, 2002. "The Perverse Effects of Partial Labour Market Reform: fixed--Term Contracts in France," Economic Journal, Royal Economic Society, vol. 112(480), pages 214-244, June.
  18. Bruno Amable & Donatella Gatti, 2004. "Product market competition, job security, and aggregate employment," Oxford Economic Papers, Oxford University Press, vol. 56(4), pages 667-686, October.
  19. Agar Brugiavini & Franco Peracchi, 2004. "Micro-Modeling of Retirement Behavior in Italy," NBER Chapters,in: Social Security Programs and Retirement around the World: Micro-Estimation, pages 345-398 National Bureau of Economic Research, Inc.
  20. Boone, Jan, 2000. "Competition," CEPR Discussion Papers 2636, C.E.P.R. Discussion Papers.
  21. Sara Rica & Amaia Iza, 2005. "Career Planning in Spain: Do Fixed-term Contracts Delay Marriage and Parenthood?," Review of Economics of the Household, Springer, vol. 3(1), pages 49-73, November.
  22. Giuseppe Fiori & Giuseppe Nicoletti & Stefano Scarpetta & Fabio Schiantarelli, 2007. "Employment Outcomes and the Interaction Between Product and Labor Market Deregulation: Are They Substitutes or Complements?," Boston College Working Papers in Economics 663, Boston College Department of Economics, revised 08 Aug 2008.
  23. Andrea Caggese & Vicente Cuñat, 2008. "Financing Constraints and Fixed-term Employment Contracts," Economic Journal, Royal Economic Society, vol. 118(533), pages 2013-2046, November.
  24. Paul Conway & Giuseppe Nicoletti, 2006. "Product Market Regulation in the Non-Manufacturing Sectors of OECD Countries: Measurement and Highlights," OECD Economics Department Working Papers 530, OECD Publishing.
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