Fragmented Stability: Recalls and Fixed-Term Contracts in the French Labour Market

Olivier Charlot, Franck Malherbet and Eloise Menestrier ()
Additional contact information
Eloise Menestrier: DARES, French Ministry of Labour

No 17486, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This study investigates in a European perspective the phenomenon of recalls, in which previously laid off or furloughed employees are rehired by the same employer. It specifically examines the French labour market, notable for its pronounced degree of contractual dualism. A novel theoretical model is proposed, illustrating that recalls linked to fixed-term contracts contribute to employment fragmentation. Then, drawing on extensive linked employer-employee data from France spanning 2012 to 2019, we offer fresh empirical insights into recall practices. Our findings reveal a substantial recall rate of 44%, primarily involving fixed-term contracts of short duration, highlighting the strong link between recalls and contractual dualism. Contrary to expectations, recalls are prevalent even in sectors with stringent fixed-term contract regulations, suggesting potential lapses in enforcement. Our results suggest that a significant proportion of recalls could breach the legal requirements governing the use of fixed-term contracts. At a more granular level, over a quarter of recalled workers are rehired more than five times a year, with women and older employees disproportionately affected—further intensifying labour market segmentation. Firm-level analysis reveals a positive correlation between recalls and both firm size and productivity, while primarily attributing recall practices to fixed firm characteristics. This is observed both in the share of entries into recalled employment and in the duration of contracts upon recall. Overall, recalls may meet firms' structural needs, however, insufficient incentives to stabilise employment and weak regulatory enforcement contribute to increased employment fragmentation and labour market segmentation. Overall, the joint use of recalls and fixed-term contracts leads to a particular labour market dynamics that we term as fragmented stability.

Keywords: fixed-term contracts; recalls; rehiring; employment protection legislation (search for similar items in EconPapers)
JEL-codes: J21 J41 J42 J63 J64 J68 (search for similar items in EconPapers)
Pages: 79 pages
Date: 2024-11
New Economics Papers: this item is included in nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://docs.iza.org/dp17486.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp17486

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().