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Fixed-term Contracts, Transitions and Wage Growth: Evidence from Spain

Author

Listed:
  • Antonio CAPARROS RUIZ
  • Lucia NAVARRO GOMEZ

    (Universidad de Malaga, Spain)

Abstract

Employment instability is considered one of the main problems of the Spanish labour market. Thus, the proportion of temporary workers in Spain is around 30 per cent that is the highest rate of the European Union countries. The persistence of this situation could increase the risk of labour market segmentation. This paper presents new evidence of the factors affecting workers' transition from temporary work to permanent one and analyses whether this transition has a positive effect on wage growth. The former objective is obtained by estimating discrete choice models and the latter by estimating a wage growth equation correcting for selectivity bias through the two-step method developed by Trost and Lee (1984). The data are obtained from the second and third waves of the Spanish Household Panel Survey (INE 1996) conducted over the period 1995–1996. The main results are, on the one hand, that personal and job characteristics have a significant influence on the probability of becoming a permanent worker and, on the other hand, that this transition has an important positive effect on wage growth.

Suggested Citation

  • Antonio CAPARROS RUIZ & Lucia NAVARRO GOMEZ, 2009. "Fixed-term Contracts, Transitions and Wage Growth: Evidence from Spain," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 1, pages 205-218.
    • Handle: RePEc:ddj:fseeai:y:2009:i:1:p:205-218
    as

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    References listed on IDEAS

    as
    1. Maia Güell & Barbara Petrongolo, 2000. "Workers Transitions from Temporary to Permanent Employment: the Spanish Case," CEP Discussion Papers dp0438, Centre for Economic Performance, LSE.
    2. Catalina Amuedo-Dorantes, 2000. "Work Transitions into and Out of Involuntary Temporary Employment in a Segmented Market: Evidence from Spain," ILR Review, Cornell University, ILR School, vol. 53(2), pages 309-325, January.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Marta Silva & Luis Filipe Martins & Helena Lopes, 2015. "Asymmetric labour market reforms and wage growth with fixed-term contracts: does learning about match quality matter?," Working Papers Series 2 15-04, ISCTE-IUL, Business Research Unit (BRU-IUL).

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    More about this item

    Keywords

    labour force transitions; temporary and permanent workers; wage growth;
    All these keywords.

    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J79 - Labor and Demographic Economics - - Labor Discrimination - - - Other

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