The transition of workers from temporary to permanent employment: The Spanish case

Maia Güell-Rotllan and Barbara Petrongolo

UC3M Working papers. Economics from Universidad Carlos III de Madrid. Departamento de Economía

Abstract: Since fixed-term contracts were introduced in Spain, 98% of all new contracts have been of this type. Despite this massive flexibilisation of the labour market, Spanish unemployment still hits more than 20% of the labour force. To assess the effects of the introduction of fixed-term contracts on the labour market it is important to understand the dynamics of the conversion of temporary contracts into permanent ones. To address this issue we estimate a duration model for temporary employment, with competing risks of flowing into permanent employment versus non-employment, and flexible duration dependence. Preliminary results show that the probability of obtaining the renewal of a fixed-term contract on a permanent basis is not affected by the state of the business cycle. At the same time, the base-line hazard for renewals has a spike at three years of duration, coinciding with the legal limit of fixed-term contracts.

Keywords: Fixed-term; contracts; Turnover; Dual; labour; markets (search for similar items in EconPapers)
Date: 1998-11
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Citations: View citations in EconPapers (1)

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