Escaping Social Pressure: Fixed-Term Contracts in Multi-Establishment Firms

Andrea Bassanini, Eve Caroli, Francois Fontaine and Antoine Rebérioux ()
Additional contact information
Antoine Rebérioux: Université de Paris

No 14029, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We develop a simple theoretical model showing that, by adding to the adjustment costs associated with permanent contracts, local social pressure against dismissals creates an incentive for CEOs to rely on fixed-term contracts, in an attempt to escape social pressure. Using linked employer-employee data, we show that establishments located closer to headquarters have higher shares of fixed-term contracts in hiring than those located further away whenever firms' headquarters are located in self-centered communities and the CEO not only works but also lives there. We show that these findings can only be explained by local social pressure.

Keywords: social pressure; employment contracts; adjustment costs; CEO reputation (search for similar items in EconPapers)
JEL-codes: J23 J41 M14 M55 R12 (search for similar items in EconPapers)
Pages: 64 pages
Date: 2021-01
New Economics Papers: this item is included in nep-cta, nep-hrm and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published - published in: Journal of Economic Behavior and Organization, 2021, 188, 697-715

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https://docs.iza.org/dp14029.pdf (application/pdf)

Related works:
Journal Article: Escaping social pressure: Fixed-term contracts in multi-establishment firms (2021)
Working Paper: Escaping social pressure: Fixed-term contracts in multi-establishment firms (2021)
Working Paper: Escaping social pressure: Fixed-term contracts in multi-establishment firms (2021)
Working Paper: Escaping Social Pressure: Fixed-Term Contracts in Multi-Establishment Firms (2021)
Working Paper: Escaping Social Pressure: Fixed-Term Contracts in Multi-Establishment Firms (2021)
Working Paper: Escaping Social Pressure: Fixed-Term Contracts in Multi-Establishment Firms (2019)
Working Paper: Escaping Social Pressure: Fixed-Term Contracts in Multi-Establishment Firms (2019)
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