Paper #682
- Title:
- How binding are legal limits? Transitions from temporary to permanent work in Spain
- Authors:
- Maia GĂĽell and Barbara Petrongolo
- Date:
- May 2003 (Revised: July 2005)
- Abstract:
- This paper studies the duration pattern of …xed-term contracts and the determinants of their conversion into permanent ones in Spain, where the share of …xed-term employment is the highest in Europe. We estimate a duration model for temporary employment, with competing risks of terminating into permanent employment versus alternative states, and ‡exible duration dependence. We …nd that conversion rates are generally below 10%. Our estimated conversion rates roughly increase with tenure, with a pronounced spike at the legal limit, when there is no legal way to retain the worker on a temporary contract. We argue that estimated di¤erences in conversion rates across categories of workers can stem from di¤erences in worker outside options and thus the power to credibly threat to quit temporary jobs.
- Keywords:
- Fixed-term contracts, duration models
- JEL codes:
- C41, J41, J60
- Area of Research:
- Labour, Public, Development and Health Economics
- Published in:
- Labour Economics, 14 (2), 153-183, 2007
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