Reassessing Labour Market Reforms: A Critique

Pramod (Raja) Junankar and Muhunthan Jayanthakumaran
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Muhunthan Jayanthakumaran: University of New South Wales

No 8385, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper provides a critique of Faccini (2014) that allegedly shows that temporary contracts lead to lower unemployment in Europe. Using Faccini's data and his estimation methods, we show that the Fixed Effects estimation results collapse when we make slight alterations in the sample size or the independent variables used. The Arellano-Bond estimates are meaningless since the number of instruments is almost equal to the number of observations. To conclude we find that there is no evidence to support the conclusion that greater use of temporary contracts would decrease unemployment.

Keywords: unemployment; temporary contracts; employment protection (search for similar items in EconPapers)
JEL-codes: J01 J08 J21 J64 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2014-08
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