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The transition of workers from temporary to permanent employment: The Spanish case

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  • Güell-Rotllan, Maia
  • Petrongolo, Barbara

Abstract

Since fixed-term contracts were introduced in Spain, 98% of all new contracts have been of this type. Despite this massive flexibilisation of the labour market, Spanish unemployment still hits more than 20% of the labour force. To assess the effects of the introduction of fixed-term contracts on the labour market it is important to understand the dynamics of the conversion of temporary contracts into permanent ones. To address this issue we estimate a duration model for temporary employment, with competing risks of flowing into permanent employment versus non-employment, and flexible duration dependence. Preliminary results show that the probability of obtaining the renewal of a fixed-term contract on a permanent basis is not affected by the state of the business cycle. At the same time, the base-line hazard for renewals has a spike at three years of duration, coinciding with the legal limit of fixed-term contracts.

Suggested Citation

  • Güell-Rotllan, Maia & Petrongolo, Barbara, 1998. "The transition of workers from temporary to permanent employment: The Spanish case," UC3M Working papers. Economics 6080, Universidad Carlos III de Madrid. Departamento de Economía.
    • Handle: RePEc:cte:werepe:6080
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    References listed on IDEAS

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    1. repec:cte:werepe:7215 is not listed on IDEAS
    2. Bentolila, Samuel & Saint-Paul, Gilles, 1992. "The macroeconomic impact of flexible labor contracts, with an application to Spain," European Economic Review, Elsevier, vol. 36(5), pages 1013-1047, June.
    3. Samuel Bentolila & Juan J. Dolado, 1994. "Labour Flexibility and Wages: Lessons from Spain," Working Papers wp1994_9406, CEMFI.
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    Cited by:

    1. Chung, Heejung, 2005. "Different paths towards Flexibility, Deregulated employment protection or temporary employment?," MPRA Paper 2396, University Library of Munich, Germany, revised Oct 2005.

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    Keywords

    Fixed-term contracts;

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