How Binding are Legal Limits? Transitions from Termporary to Permanent Work in Spain

Barbara Petrongolo and Maia Güell
Authors registered in the RePEc Author Service: Maia Güell ()

No 75, Working Papers from Barcelona School of Economics

Abstract: In the mid-1980s,most accessions to permanent employment in several European countries have been through fixed-term contracts. This paper studies the duration pattern of fixed-term contracts and the determinants of their conversion into permanent ones in Spain, where the share of fixed-term employment is the highest in Europe. We estimate a duration model for temporary employment, with competing risks of terminating into permanent employment versus alternative states, and flexible duration dependence. Our estimated conversion rate has a clear, pronounced spike at 3 years of duration, coinciding with the legal maximum duration of these contracts, suggesting that some fixed-term contracts are only converted when there is no other way to retain the worker. Also, there is a spike around 1 year of duration, indirectly suggesting that some fixed-term contracts may be used as screening devices: workers who successfully pass the screening may obtain a conversion much before the legal duration limit.

Keywords: fixed-terms contracts; duration models (search for similar items in EconPapers)
JEL-codes: C41 J41 J60 (search for similar items in EconPapers)
Date: 2015-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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Related works:
Journal Article: How binding are legal limits? Transitions from temporary to permanent work in Spain (2007)
Working Paper: How binding are legal limits? Transitions from temporary to permanent work in Spain (2005)
Working Paper: How Binding are Legal Limits? Transitions from Temporary to Permanent Work in Spain (2003)
Working Paper: How Binding Are Legal Limits? Transitions from Temporary to Permanent Work in Spain (2003)
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