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Intergenerational effects of employment protection reforms

Jenifer Ruiz-Valenzuela

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Job insecurity has worsened in most OECD countries in the aftermath of the Great Recession. Using Labour Force Survey data, I estimate the link between parental job insecurity (as measured by the contract type held by parents) and children's school related outcomes. Endogeneity issues affecting the type of contract held by parents are dealt with by constructing an instrument based on regional, time and demographic variation in the amount of wage subsidies available to firms to convert fixed-term contracts into permanent ones in Spain. The findings suggest that children whose fathers are less job insecure are considerably more likely to graduate from compulsory education on time. They are also less likely to drop out of the education system and be classified as Not in Education, Employment or Training at age sixteen. Employment protection reforms that liberalise the use of fixed-term contracts and do not take into account these negative externalities on other members of the household are therefore understating their overall cost.

Keywords: employment protection; fixed-term contracts; intergenerational impacts; job insecurity; school outcomes (search for similar items in EconPapers)
JEL-codes: J01 N0 R14 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2020-01-01
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Published in Labour Economics, 1, January, 2020, 62. ISSN: 0927-5371

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