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Beware of the "End Contractualization!" Battle Cry

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  • Paqueo, Vicente B.
  • Orbeta, Aniceto Jr. C.

Abstract

In the aftermath of the 2016 election, labor leaders and their political allies pushed for an immediate end to the so-called employment “contractualization”, a policy proposal currently popular with voters and politicians. The idea is for the government to tighten and reduce, if not prohibit, the use of temporary employment contracts (TECs) and job outsourcing. This paper analyzes the policy idea and its potential economic consequences by looking at the roles of TECs and job outsourcing in the functioning of efficient labor markets, the experience of European countries regarding TECs, and Philippine employment data. The study finds that while the policy idea is anchored on good intentions, it can undermine the goal of achieving rapid, inclusive, and sustained economic growth. The realization of this outcome depends on the nature of the policy design actually adopted. On this point, the paper suggests a framework that can be useful in formulating a coherent policy on temporary employment and a strategy for dealing with “endo” practices.

Suggested Citation

  • Paqueo, Vicente B. & Orbeta, Aniceto Jr. C., 2016. "Beware of the "End Contractualization!" Battle Cry," Discussion Papers DP 2016-55, Philippine Institute for Development Studies.
  • Handle: RePEc:phd:dpaper:dp_2016-55
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    References listed on IDEAS

    as
    1. Shutao Cao & Enchuan Shao & Pedro Silos, 2010. "Fixed-term and permanent employment contracts: theory and evidence," FRB Atlanta Working Paper 2010-13, Federal Reserve Bank of Atlanta.
    2. World Bank, 2016. "Republic of the Philippines Labor Market Review," World Bank Other Operational Studies 24768, The World Bank.
    3. Sarah Lynne S. Daway & Raul V. Fabella, 2015. "Development progeria: the role of institutions and the exchange rate," Philippine Review of Economics, University of the Philippines School of Economics and Philippine Economic Society, vol. 52(2), pages 84-99, December.
    4. Emmanuel S. de Dios & Katrina Dinglasan, 2015. "Just how good is unemployment as a measure of welfare? A note," Philippine Review of Economics, University of the Philippines School of Economics and Philippine Economic Society, vol. 52(2), pages 234-245, December.
    5. Renato Faccini, 2014. "Reassessing Labour Market Reforms: Temporary Contracts as a Screening Device," Economic Journal, Royal Economic Society, vol. 124(575), pages 167-200, March.
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    1. Kilders, Valerie & Caputo, Vincenzina & Liverpool-Tasie, Lenis Saweda O., 2021. "Consumer ethnocentric behavior and food choices in developing countries: The case of Nigeria," Food Policy, Elsevier, vol. 99(C).

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    More about this item

    Keywords

    Philippines; employment; jobs; labor market policy; contracts; contractualization; temporary employment contracts (TECs); job outsourcing; endo;
    All these keywords.

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