RT Journal Article
T1 Labor contracts and flexibility: evidence from a labor market reform in Spain
A1 Aguirregabiria, Víctor
A1 Alonso-Borrego, César
AB This 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.
PB Wiley
SN 0095-2583
YR 2014
FD 2014-04
LK https://hdl.handle.net/10016/20757
UL https://hdl.handle.net/10016/20757
LA eng
NO The second author acknowledges research funding from theSpanish Ministry of Finance and Competitiveness, Grant no.ECO2012-31358
DS e-Archivo
RD 3 may. 2024