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Landing a Permanent Contract: Do Job Interruptions and Employer Diversification Matter?

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  • Yolanda Rebollo Sanz

    () (Department of Economics, Universidad Pablo de Olavide)

Abstract

A discrete-time multivariate hazard model is applied to investigate whether an individual’s employment history conditions her chances of eventually obtaining a permanent contract in the Spanish labour market. This study differentiates the incidence of lagged duration dependence from occurrence dependence and individual employment history conditions are not exclusively defined in terms of the number of temporary contracts and job interruptions experienced by the worker, but also by the diversity of her past employers. My analysis focuses on Spanish labour market entrants aged between 18 and 29 for the 1995-2006 period, and performs the estimation by three age cohort groups separately to control for heterogeneity in initial conditions. The results suggest that some workers may become “trapped” in the temporary employment bracket, since their chances of obtaining a permanent contract seem to drop after some months of accumulating several temporary contracts under the same employer between bouts of unemployment. By contrast, moving from one firm to another as a temporary worker might have a positive influence on exit rates to permanent employment. Hence, this paper highlight that it is important to take into account whether or not the worker remains in the same firm when accumulating temporary contracts to test for the stepping stone effect of temporary contracts.

Suggested Citation

  • Yolanda Rebollo Sanz, 2009. "Landing a Permanent Contract: Do Job Interruptions and Employer Diversification Matter?," Working Papers 09.07, Universidad Pablo de Olavide, Department of Economics.
  • Handle: RePEc:pab:wpaper:09.07
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    References listed on IDEAS

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    More about this item

    Keywords

    Event history model; lagged duration dependence; occurrence dependence; stepping stone effect; firm mobility; Multiple Spells duration models; Job Interruptions;

    JEL classification:

    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies

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