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

Author

Listed:
  • José Ignacio García Pérez

    (U. Pablo de Olavide & FEDEA)

  • Ioana Marinescu

    (U. of Chicago & NBER)

  • Judit Vall Castello

    (U. 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

  • José Ignacio García Pérez & Ioana Marinescu & Judit Vall Castello, 2015. "Can Fixed-Term Contracts Put Low Skilled Youth on a Better Career path? Evidence from Spain," Working Papers 15.12, Universidad Pablo de Olavide, Department of Economics.
    • Handle: RePEc:pab:wpaper:15.12
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    References listed on IDEAS

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    More about this item

    Keywords

    Temporary Contracts; Long-term impact; Policy evaluation; Young workers; Discontinuity design; Spain.;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation

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