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Can Fixed-Term Contracts Put Low Skilled Youth on a Better Career Path? Evidence from Spain

Author

Listed:
  • Garcia Perez, J. Ignacio

    () (Universidad Pablo de Olavide)

  • Marinescu, Ioana E.

    () (University of Pennsylvania)

  • Vall-Castello, Judit

    () (Universitat Pompeu Fabra)

Abstract

By reducing the commitment made by employers, fixed-term contracts can help low-skilled youth find a first job. However, the long-term impact of fixed-term contracts on these workers' careers may be negative. Using Spanish social security data, we analyze the impact of a large liberalization in the regulation of fixed-term contracts in 1984. Using a cohort regression discontinuity design, we find that the reform raised the likelihood of male high-school dropouts working before age 19 by 9%. However, in the longer run, the reform reduced number of days worked (by 4.5%) and earnings (by 9%).

Suggested Citation

  • Garcia Perez, J. Ignacio & Marinescu, Ioana E. & Vall-Castello, Judit, 2016. "Can Fixed-Term Contracts Put Low Skilled Youth on a Better Career Path? Evidence from Spain," IZA Discussion Papers 9777, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp9777
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    References listed on IDEAS

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    Cited by:

    1. J. Ignacio García Pérez, 2015. "Should severance pay be consistent for all workers?," IZA World of Labor, Institute for the Study of Labor (IZA), pages 174-174, August.
    2. B. Contini & J. Ignacio Garcia Perez & T. Pusch & R. Quaranta, 2017. "New Approaches to the Study of Long Term Non-Employment Duration in Italy, Germany and Spain," Working Papers 2017-14, FEDEA.
    3. Martins, Pedro S., 2016. "Should the Maximum Duration of Fixed-Term Contracts Increase in Recessions? Evidence from a Law Reform," IZA Discussion Papers 10206, Institute for the Study of Labor (IZA).
    4. Luisa Natali & Bruno Martorano & Sudhanshu Handa & Goran Holmqvist & Yekaterina Chzhen, 2014. "Trends in Child Well-being in EU Countries during the Great Recession: A cross-country comparative perspective," Papers inwopa730, Innocenti Working Papers.
    5. Yosuke Jin & Aida Caldera Sánchez & Pilar Garcia Perea, 2017. "Reforms for more and better quality jobs in Spain," OECD Economics Department Working Papers 1386, OECD Publishing.
    6. Marta Silva & Luis Filipe Martins & Helena Lopes, 2015. "Asymmetric labour market reforms and wage growth with fixed-term contracts: does learning about match quality matter?," Working Papers Series 2 15-04, ISCTE-IUL, Business Research Unit (BRU-IUL).
    7. repec:spr:series:v:8:y:2017:i:4:d:10.1007_s13209-017-0166-9 is not listed on IDEAS

    More about this item

    Keywords

    temporary contracts; long-term impact; labour market career;

    JEL classification:

    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies

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