Can fixed-term contracts put low skilled youth on a better career path? evidence from Spain J. Ignacio García - Pérez, Ioana Marinescu and Judit Vall Castello
By: García Pérez, José Ignacio
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Contributor(s): Marinescu, Ioana | Vall Castello, Judit.
Material type: 
ArticlePublisher: 2019Subject(s): CONTRATO DE TRABAJO | CONTRATOS TEMPORALES | JOVENES | HONORARIOS PROFESIONALES | ESPAÑA
In:
The Economic Journal v. 129, n. 620, May 2019, p. 693-1730Summary: 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 analysed the impact of a large liberalisation in the regulation of fixed-term contracts in 1984. Using a cohort regression discontinuity design, we find that over the first 10 years in the labour market, the reform reduced the number of days worked (by 4.9%) and earnings (by 9.8%). Over 27 years of labour market career, yearly earnings losses amount to a persistent 7.3%.
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| OP 282/2019/618-1 Incidence and distributional effects of value added taxes | OP 282/2019/619 The Economic Journal | OP 282/2019/620 The Economic Journal | OP 282/2019/620-1 Can fixed-term contracts put low skilled youth on a better career path? | OP 282/2019/620-2 Taxation, innovation and entrepreneurship | OP 282/2019/620-3 Nonprofit tax exemptions, for-profit competition and spillovers to community services | OP 282/2019/620-4 Distributional implications of joint tax evasion |
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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 analysed the impact of a large liberalisation in the regulation of fixed-term contracts in 1984. Using a cohort regression discontinuity design, we find that over the first 10 years in the labour market, the reform reduced the number of days worked (by 4.9%) and earnings (by 9.8%). Over 27 years of labour market career, yearly earnings losses amount to a persistent 7.3%.
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