 Dual Labor Markets and Labor Protection in an Estimated Search and Matching ModelILADES-UAH Working Papers from Universidad Alberto Hurtado/School of Economics and Business Abstract: Temporary contracts, as well as labor protection, have been used to reduce unemployment with the latter leading to fewer job destructions. This paper estimates a search and matching model with labor protection and dual labor markets in which the use of temporary contracts is endogenous. Chilean data is used to evaluate the role of labor protection legislation and the use of temporary contracts in unemployment, welfare, and inequality. Results indicate that both types of contracts survive in equilibrium. Temporary contracts negatively affect the frequency with which regular jobs arrive, offsetting any positive effect of firing costs on unemployment. Temporary contracts increase flexibility but welfare gains are observed only if labor protection is very stringent. Keywords: Temporary Jobs; Labor Protection; Search Models; Maximum Likelihood Estimation; Structural Estimation. (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ila:ilades:inv295 Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in ILADES-UAH Working Papers from Universidad Alberto Hurtado/School of Economics and Business Contact information at EDIRC. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.