IDEAS home Printed from https://ideas.repec.org/p/upf/upfgen/602.html
   My bibliography  Save this paper

Fixed-term contracts and the duration distribution of unemployment

Author

Listed:
  • Maia Güell

Abstract

In the mid-1980s, many European countries introduced fixed-term contracts. Since then their labor markets have become more dynamic. This paper studies the implications of such reforms for the duration distribution of unemployment, with particular emphasis on the changes in the duration dependence. I estimate a parametric duration model using cross-sectional data drawn from the Spanish Labor Force Survey from 1980 to 1994 to analyze the chances of leaving unemployment before and after the introduction of fixed-term contracts. I find that duration dependence has increased since such reform. Semi-parametric estimation of the model also shows that for long spells, the probability of leaving unemployment has decreased since such reform.

Suggested Citation

  • Maia Güell, 2002. "Fixed-term contracts and the duration distribution of unemployment," Economics Working Papers 602, Department of Economics and Business, Universitat Pompeu Fabra, revised May 2003.
    • Handle: RePEc:upf:upfgen:602
    as

    Download full text from publisher

    File URL: https://econ-papers.upf.edu/papers/602.pdf
    File Function: Whole Paper
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. van den Berg, Gerard J. & van der Klaauw, Bas, 2001. "Combining micro and macro unemployment duration data," Journal of Econometrics, Elsevier, vol. 102(2), pages 271-309, June.
    2. Canziani, Patrizia & Petrongolo, Barbara, 2001. "Firing costs and stigma: A theoretical analysis and evidence from microdata," European Economic Review, Elsevier, vol. 45(10), pages 1877-1906, December.
    3. Olivier Jean Blanchard & Peter Diamond, 1994. "Ranking, Unemployment Duration, and Wages," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 61(3), pages 417-434.
    4. Dale T. Mortensen, 1977. "Unemployment Insurance and Job Search Decisions," ILR Review, Cornell University, ILR School, vol. 30(4), pages 505-517, July.
    5. Machin, Stephen & Manning, Alan, 1999. "The causes and consequences of longterm unemployment in Europe," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 47, pages 3085-3139, Elsevier.
    6. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173.
    7. Maia Guell, 2000. "Fixed-term Contracts and Unemployment: an Efficiency Wage Analysis," Working Papers 812, Princeton University, Department of Economics, Industrial Relations Section..
    8. Garcia Serrano, Carlos, 1999. "Worker Turnover and Job Reallocation: The Role of Fixed-Term Contracts," Oxford Economic Papers, Oxford University Press, vol. 51(1), pages 237-237, January.
    9. Guell, Maia, 2000. "Fixed-term contracts and unemployment: an efficiency wage analysis," LSE Research Online Documents on Economics 20181, London School of Economics and Political Science, LSE Library.
    10. Maia Guell, 2000. "Fixed-term Contracts and Unemployment: an Efficiency Wage Analysis," Working Papers 812, Princeton University, Department of Economics, Industrial Relations Section..
    11. Alison L Booth & Juan J. Dolado & Jeff Frank, 2002. "Symposium On Temporary Work Introduction," Economic Journal, Royal Economic Society, vol. 112(480), pages 181-188, June.
    12. P. Jenkins, Stephen & Garcia-Serrano, Carlos, 2000. "Re-employment probabilities for Spanish men: what role does the unemployment benefit system play?," ISER Working Paper Series 2000-17, Institute for Social and Economic Research.
    13. Victor Aguirregabiria & Cesar Alonso-Borrego, 2014. "Labor Contracts And Flexibility: Evidence From A Labor Market Reform In Spain," Economic Inquiry, Western Economic Association International, vol. 52(2), pages 930-957, April.
    14. Atkinson, Anthony B & Micklewright, John, 1991. "Unemployment Compensation and Labor Market Transitions: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 29(4), pages 1679-1727, December.
    15. Schmitt, John & Wadsworth, Jonathan, 1993. "Unemployment Benefit Levels and Search Activity," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 55(1), pages 1-24, February.
    16. Maia Güell & Barbara Petrongolo, 2000. "Workers Transitions from Temporary to Permanent Employment: the Spanish Case," CEP Discussion Papers dp0438, Centre for Economic Performance, LSE.
    17. Nickell, S J, 1979. "The Effect of Unemployment and Related Benefits on the Duration of Unemployment," Economic Journal, Royal Economic Society, vol. 89(353), pages 34-49, March.
    18. Alfonso Alba-Ramirez, 1999. "Explaining the transitions out of unemployment in Spain: the effect of unemployment insurance," Applied Economics, Taylor & Francis Journals, vol. 31(2), pages 183-193.
    19. Samuel Bentolila & Juan J. Dolado, 1994. "Labour Flexibility and Wages: Lessons from Spain," Working Papers wp1994_9406, CEMFI.
    20. Olympia Bover & Manuel Arellano & Samuel Bentolila, 2002. "Unemployment Duration, Benefit Duration and the Business Cycle," Economic Journal, Royal Economic Society, vol. 112(479), pages 223-265, April.
    21. Nickell, Stephen J, 1979. "Estimating the Probability of Leaving Unemployment," Econometrica, Econometric Society, vol. 47(5), pages 1249-1266, September.
    22. Mortensen, Dale T, 1970. "Job Search, the Duration of Unemployment, and the Phillips Curve," American Economic Review, American Economic Association, vol. 60(5), pages 847-862, December.
    23. repec:fth:prinin:433 is not listed on IDEAS
    24. Petrongolo, Barbara, 2000. "Firing Cost and Stigma: A Theoretical Analysis and Empirical Evidence on Micro Data," Econometric Society World Congress 2000 Contributed Papers 1678, Econometric Society.
    25. Wadsworth, J., 1989. "Unemployment Benefits And Search Effort In The Uk Labour Market," Papers 333, London School of Economics - Centre for Labour Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Guell, Maia & Hu, Luojia, 2006. "Estimating the probability of leaving unemployment using uncompleted spells from repeated cross-section data," Journal of Econometrics, Elsevier, vol. 133(1), pages 307-341, July.
    2. Miltiadis Staboulis, 2019. "Flexible Forms of Employment Integration. Assessing the Implementation of Pilot Projects Promoting Flexible Arrangements: The Case of Cyprus," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 17(2), pages 221-238.
    3. Garrouste, Christelle & Kozovska, Kornelia & Arjona Perez, Elena, 2010. "Education and Long-Term Unemployment," MPRA Paper 25073, University Library of Munich, Germany.
    4. J. García-Pérez & Fernando Muñoz-Bullón, 2004. "Are Temporary Help Agencies changing mobility patterns in the Spanish labour market?," Spanish Economic Review, Springer;Spanish Economic Association, vol. 7(1), pages 43-65, January.
    5. Zuzana Potužáková & Stanislava Mildeová, 2015. "Analýza příčin a důsledků nezaměstnanosti mladých v Evropské unii [Analysis of Causes and Consequences of the Youth Unployment in the EU]," Politická ekonomie, Prague University of Economics and Business, vol. 2015(7), pages 877-894.
    6. Bukowski, Maciej & Lewandowski, Piotr & Koloch, Grzegorz & Baranowska, Anna & Magda, Iga & Szydlowski, Arkadiusz & Bober, Magda & Bieliński, Jacek & Zawistowski, Julian & Sarzalska, Malgorzata, 2008. "Employment in Poland 2007: Security on flexible labour market," MPRA Paper 14284, University Library of Munich, Germany.
    7. Tejada, Mauricio M., 2017. "Dual labor markets and labor protection in an estimated search and matching model," Labour Economics, Elsevier, vol. 46(C), pages 26-46.
    8. Edoardo Di Porto & Leandro Elia & Cristina Tealdi, 2013. "The "emersion" effect: an ex post and ex ante social program evaluation on labor tax evasion in Italy," Working Papers 2/2013, IMT School for Advanced Studies Lucca, revised Jun 2013.
    9. Sciulli, Dario, 2006. "Making the italian labor market more flexible: an evaluation of the treu reform," UC3M Working papers. Economics we063408, Universidad Carlos III de Madrid. Departamento de Economía.
    10. 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.
    11. Ulku,Hulya & Muzi,Silvia, 2015. "Labor market regulations and outcomes in Sweden : a comparative analysis of recent trends," Policy Research Working Paper Series 7229, The World Bank.
    12. Chung, Heejung, 2005. "Different paths towards Flexibility, Deregulated employment protection or temporary employment?," MPRA Paper 2396, University Library of Munich, Germany, revised Oct 2005.
    13. P. Garcia-del-Barrio & L. A. Gil-Alana, 2009. "New revelations about unemployment persistence in Spain: time-series and panel data approaches using regional data," Applied Economics, Taylor & Francis Journals, vol. 41(2), pages 219-236.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Guell, Maia & Hu, Luojia, 2006. "Estimating the probability of leaving unemployment using uncompleted spells from repeated cross-section data," Journal of Econometrics, Elsevier, vol. 133(1), pages 307-341, July.
    2. Maia Guell, 2000. "The Effects of Fixed-Term Contracts on the Duration Distribution of Unemployment: the Spanish Case," Working Papers 822, Princeton University, Department of Economics, Industrial Relations Section..
    3. repec:eee:labchp:v:3:y:1999:i:pc:p:3085-3139 is not listed on IDEAS
    4. Stephen P. Jenkins & Carlos García-Serrano, 2000. "Re-employment Probabilities for Spanish Men: What Role Does the Unemployment Benefit System Play?," Discussion Papers of DIW Berlin 216, DIW Berlin, German Institute for Economic Research.
    5. Knut Roed & Tao Zhang, 2003. "Does Unemployment Compensation Affect Unemployment Duration?," Economic Journal, Royal Economic Society, vol. 113(484), pages 190-206, January.
    6. Maia Guell, 2000. "The effects of fixed-term contracts on the duration distribution of unemployment: the Spanish case," Working Papers 822, Princeton University, Department of Economics, Industrial Relations Section..
    7. Guell, Maia & Petrongolo, Barbara, 2007. "How binding are legal limits? Transitions from temporary to permanent work in Spain," Labour Economics, Elsevier, vol. 14(2), pages 153-183, April.
    8. Ochsen, Carsten, 2008. "How the distribution of unemployment by duration affects the unemployment rate," Thuenen-Series of Applied Economic Theory 88, University of Rostock, Institute of Economics.
    9. Jouko Verho, 2005. "Unemployment Duration and Business Cycles in Finland," Working Papers 214, Työn ja talouden tutkimus LABORE, The Labour Institute for Economic Research LABORE.
    10. Martín-Román, Ángel L., 2022. "Beyond the added-worker and the discouraged-worker effects: the entitled-worker effect," Economic Modelling, Elsevier, vol. 110(C).
    11. Stephen P. Jenkins & Carlos García‐Serrano, 2004. "The Relationship between Unemployment Benefits and Re‐employment Probabilities: Evidence from Spain," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 66(2), pages 239-260, May.
    12. Olympia Bover & Manuel Arellano & Samuel Bentolila, 2002. "Unemployment Duration, Benefit Duration and the Business Cycle," Economic Journal, Royal Economic Society, vol. 112(479), pages 223-265, April.
    13. Richard Layte & Tim Callan, 2001. "Unemployment, Welfare Benefits and the Financial Incentive to Work," The Economic and Social Review, Economic and Social Studies, vol. 32(2), pages 103-129.
    14. Pieter Serneels, 2004. "The Nature of Unemployment in Urban Ethiopia," CSAE Working Paper Series 2004-01, Centre for the Study of African Economies, University of Oxford.
    15. Kuo, Mien-Yun & Smith, Eric, 2009. "Marketplace matching in Britain: Evidence from individual unemployment spells," Labour Economics, Elsevier, vol. 16(1), pages 37-46, January.
    16. Ferreira, Maria & de Grip, Andries & van der Velden, Rolf, 2018. "Does informal learning at work differ between temporary and permanent workers? Evidence from 20 OECD countries," Labour Economics, Elsevier, vol. 55(C), pages 18-40.
    17. Reis, Mauricio Cortez & Camargo, José Márcio, 2008. "Aposentadoria, Pressão Salarial e Desemprego por Nível de Qualificação," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 62(3), November.
    18. Ignacio Moral-Arce & Javier Martín-Román & Ángel L. Martín-Román, 2019. "Cessation of Activity Benefit for Spanish Self-employed Workers: A Heterogeneous Impact Evaluation," Hacienda Pública Española / Review of Public Economics, IEF, vol. 231(4), pages 41-79, December.
    19. Konstantinos Tatsiramos & Jan C. Ours, 2014. "Labor Market Effects Of Unemployment Insurance Design," Journal of Economic Surveys, Wiley Blackwell, vol. 28(2), pages 284-311, April.
    20. Peter Fredriksson & Bertil Holmlund, 2006. "Improving Incentives in Unemployment Insurance: A Review of Recent Research," Journal of Economic Surveys, Wiley Blackwell, vol. 20(3), pages 357-386, July.
    21. Olympia Bover & Manuel Arellano & Samuel Bentolila, 1997. "Unemployment Duration, Benefit Duration, and the Business Cycle.Versión Revisada," Working Papers wp1997_9717, CEMFI.

    More about this item

    Keywords

    Cross-sectional data; duration model; turnover;
    All these keywords.

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:upf:upfgen:602. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: http://www.econ.upf.edu/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.