The Effect of Product Market Competition on Job Instability

Ainoa Aparicio

No 5669, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper assesses the impact of product market competition on job instability as proxied by the use of fixed-term labor contracts. Using both worker data from the Spanish Labor Force Survey and firm data from the Spanish Business Strategies Survey, I show that job instability rises with competition. In particular, a one standard deviation increase in competition in an economic sector decreases the probability that a fixed-term worker gets an open-ended contract within that sector in a given year by more than 30%. The effect is identified by means of exogenous shifts in competition brought about by changes in legislation.

Keywords: product market competition; fixed-term employment; labor contract (search for similar items in EconPapers)
JEL-codes: C33 C35 C41 J24 J6 L1 M51 (search for similar items in EconPapers)
Pages: 74 pages
Date: 2011-04
New Economics Papers: this item is included in nep-bec, nep-hme and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published - published in: Labour Economics, 2015, 35, 145 - 159

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