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Labor contracts and flexibility: evidence from a labor market reform in Spain

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dc.affiliation.dptoUC3M. Departamento de Economíaes
dc.contributor.authorAguirregabiria, Víctor
dc.contributor.authorAlonso-Borrego, César
dc.date.accessioned2015-05-19T11:05:51Z
dc.date.issued2014-04
dc.description.abstractThis paper evaluates the effects of a labor market reform in Spain that removedrestrictions on fixed-term or temporary contracts. Our empirical results are based onlongitudinal firm-level data that cover observations before and after the reform. Weposit and estimate a dynamic labor demand model with indefinite and fixed-term laborcontracts, and a general structure of labor adjustment costs. Experiments using theestimated model show important positive effects of the reform on total employment(i.e., a 3.5% increase) and job turnover. There is a strong substitution of permanentby temporary workers (i.e., a 10% decline in permanent employment). The effects onlabor productivity and the value of firms are very small. In contrast, a counterfactualreform that halved all firing costs would produce the same employment increase as theactual reform, but much larger improvements in productivity and in the value of firms.en
dc.description.sponsorshipThe second author acknowledges research funding from the Spanish Ministry of Finance and Competitiveness, Grant no. ECO2012-31358en
dc.format.mimetypeapplication/pdf
dc.identifier.bibliographicCitationAguirregabiria, V. y Alonso-Borrego, C. “Labor contracts and flexibility: evidence from a labor market reform in Spain", Economic Inquiry, April 2014, v. 52, n. 2, pp. 930-957en
dc.identifier.doi10.1111/ecin.12077
dc.identifier.issn0095-2583
dc.identifier.publicationfirstpage930
dc.identifier.publicationissue2
dc.identifier.publicationlastpage957
dc.identifier.publicationtitleEconomic Inquiryen
dc.identifier.publicationvolume52
dc.identifier.urihttps://hdl.handle.net/10016/20757
dc.identifier.uxxiAR/0000014197
dc.language.isoengen
dc.publisherWileyen
dc.relation.isversionofhttp://hdl.handle.net/10016/6302
dc.relation.isversionofhttp://hdl.handle.net/10016/3803
dc.relation.projectIDGobierno de España. ECO2012-31358es
dc.relation.publisherversionhttp://dx.doi.org/dx.doi.org/10.1111/ecin.12077
dc.rights© Wileyen
dc.rights.accessRightsopen accessen
dc.subject.ecienciaEconomíaes
dc.subject.jelJ23
dc.subject.jelJ32
dc.subject.jelJ41
dc.subject.otherJob security provisionses
dc.subject.otherEmployment protectionen
dc.subject.otherTemporary jobsen
dc.subject.otherFiring costsen
dc.subject.otherDemanden
dc.subject.otherModelsen
dc.subject.otherAdjustmenten
dc.subject.otherTurnoveren
dc.subject.otherFranceen
dc.subject.otherFlowsen
dc.titleLabor contracts and flexibility: evidence from a labor market reform in Spainen
dc.typeresearch article*
dc.type.hasVersionAM*
dspace.entity.typePublication
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