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Excess worker turnover and fixed-term contracts: Causal evidence in a two-tier system

Álvaro A. Novo and Mário Centeno ()

Working Papers from Banco de Portugal, Economics and Research Department

Abstract: Portuguese firms engage in intense reallocation, most employers simultaneously hire and separate from workers, resulting in high excess worker turnover flows. These flows are constrained by the employment protection gap between open-ended and fixed-term contracts. We explore a reform that increased the employment protection of open-ended contracts and generated a quasi-experiment. The causal evidence points to an increase in the share and in the excess turnover of fixed-term contracts in treated rms. The excess turnover of open-ended contracts remained unchanged. This result is consistent with a high degree of substitution between open-ended and fixed-term contracts. At the firm level, we also show that excess turnover is quite heterogeneous and quantify its association with firm, match, and worker characteristics.

JEL-codes: J21 J23 J63 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-lab and nep-lma
Date: 2012
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Journal Article: Excess worker turnover and fixed-term contracts: Causal evidence in a two-tier system (2012) Downloads
Working Paper: Excess Worker Turnover and Fixed-Term Contracts: Causal Evidence in a Two-Tier System (2011) Downloads
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