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Moving Towards a Single Labor Contract: Transition vs. Steady State

Listed author(s):
  • Siassi, Nawid
  • Dolado, Juan J.
  • Lalé, Etienne

This paper analyzes the optimal design of a single open-ended contract (SOEC) and studies the political economy of moving towards such a SOEC in a dual labour market. We compare two economic environments: one with flexible entry-level jobs and high employment protection at long tenure, and another with a SOEC featuring employment protection levels that increase smoothly with tenure. For illustrative purposes, we specialize the discussion of such choices to Spain. A SOEC has the potential of bringing big time efficiency and welfare gains in a steady-state sense. We also identify winners and losers in the transitional path of such a reform and analyze its political support.

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File URL: https://www.econstor.eu/bitstream/10419/112858/1/VfS_2015_pid_292.pdf
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Paper provided by Verein für Socialpolitik / German Economic Association in its series Annual Conference 2015 (Muenster): Economic Development - Theory and Policy with number 112858.

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Date of creation: 2015
Handle: RePEc:zbw:vfsc15:112858
Contact details of provider: Web page: http://www.socialpolitik.org/
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