Publication
Should the maximum duration of fixed-term contracts increase in recessions? Evidence from a law reform
| Summary: | Fixed-term contracts (FTCs) may be an important tool to promote hirings and employment, particularly in recessions or when permanent contracts are costly. Therefore, it may be useful to let some of the legal parameters of FTCs (as well as those of other labour market institutions) vary systematically over the business cycle, namely increasing their flexibility during downturns. We evaluate this idea by examining the short-term effects of a new law introduced in Portugal, in the midst of a recession, which increased the maximum duration of FTCs from three to four and a half years. Our analysis is based on regression-discontinuity (and difference-in-differences) methods, applied to matched panel data. We find a considerable take up of this measure, as conversions to permanent contracts drop by 20%. Moreover, while we do not detect significant effects on employment status in the subsequent year, worker churning is reduced significantly, as mobility of eligible fixed-term workers to other firms drops by 10%. |
|---|---|
| Main Authors: | Martins, Pedro S. |
| Subject: | Employment law Worker mobility Segmentation Counterfactual evaluation |
| Year: | 2016 |
| Country: | Portugal |
| Document type: | working paper |
| Access type: | open access |
| Associated institution: | Universidade Nova de Lisboa |
| Language: | English |
| Origin: | Repositório Institucional da UNL |
| _version_ | 1868983766288957440 |
|---|---|
| author | Martins, Pedro S. |
| author_facet | Martins, Pedro S. |
| author_role | author |
| contributor_name_str_mv | RUN |
| country_str | PT |
| creators_json_txt | [{\"Person.name\":\"Martins, Pedro S.\",\"Person.identifier.orcid\":\"0000-0001-9323-5252\"}] |
| datacite.contributors.contributor.contributorName.fl_str_mv | RUN |
| datacite.creators.creator.creatorName.fl_str_mv | Martins, Pedro S. |
| datacite.date.Accepted.fl_str_mv | 2016-09-06T00:00:00Z |
| datacite.date.available.fl_str_mv | 2019-09-30T15:21:06Z |
| datacite.date.embargoed.fl_str_mv | 2019-09-30T15:21:06Z |
| datacite.rights.fl_str_mv | http://purl.org/coar/access_right/c_abf2 |
| datacite.subjects.subject.fl_str_mv | Employment law Worker mobility Segmentation Counterfactual evaluation |
| datacite.titles.title.fl_str_mv | Should the maximum duration of fixed-term contracts increase in recessions? Evidence from a law reform |
| dc.contributor.none.fl_str_mv | RUN |
| dc.creator.none.fl_str_mv | Martins, Pedro S. |
| dc.date.Accepted.fl_str_mv | 2016-09-06T00:00:00Z |
| dc.date.available.fl_str_mv | 2019-09-30T15:21:06Z |
| dc.date.embargoed.fl_str_mv | 2019-09-30T15:21:06Z |
| dc.format.none.fl_str_mv | application/pdf |
| dc.identifier.none.fl_str_mv | http://hdl.handle.net/10362/82738 |
| dc.language.none.fl_str_mv | eng |
| dc.publisher.none.fl_str_mv | Nova SBE |
| dc.rights.none.fl_str_mv | http://purl.org/coar/access_right/c_abf2 |
| dc.subject.none.fl_str_mv | Employment law Worker mobility Segmentation Counterfactual evaluation |
| dc.title.fl_str_mv | Should the maximum duration of fixed-term contracts increase in recessions? Evidence from a law reform |
| dc.type.none.fl_str_mv | http://purl.org/coar/resource_type/c_8042 |
| description | Fixed-term contracts (FTCs) may be an important tool to promote hirings and employment, particularly in recessions or when permanent contracts are costly. Therefore, it may be useful to let some of the legal parameters of FTCs (as well as those of other labour market institutions) vary systematically over the business cycle, namely increasing their flexibility during downturns. We evaluate this idea by examining the short-term effects of a new law introduced in Portugal, in the midst of a recession, which increased the maximum duration of FTCs from three to four and a half years. Our analysis is based on regression-discontinuity (and difference-in-differences) methods, applied to matched panel data. We find a considerable take up of this measure, as conversions to permanent contracts drop by 20%. Moreover, while we do not detect significant effects on employment status in the subsequent year, worker churning is reduced significantly, as mobility of eligible fixed-term workers to other firms drops by 10%. |
| dirty | 0 |
| eu_rights_str_mv | openAccess |
| format | workingPaper |
| fulltext.url.fl_str_mv | https://run.unl.pt/bitstreams/5b6846f8-3303-4ad9-bf76-bffceb28cdcd/download |
| id | run_38b2501b0a1bbc8aefb04306ce99c49a |
| identifier.url.fl_str_mv | http://hdl.handle.net/10362/82738 |
| inst_facet_str | urn:organizationAcronym:unl{{{_:::_}}}Universidade Nova de Lisboa |
| instacron_str | unl |
| institution | Universidade Nova de Lisboa |
| instname_str | Universidade Nova de Lisboa |
| language | eng |
| network_acronym_str | run |
| network_name_str | Repositório Institucional da UNL |
| oai_identifier_str | oai:run.unl.pt:10362/82738 |
| organization_str_mv | urn:organizationAcronym:unl |
| person_str_mv | Martins, Pedro S. Martins, Pedro S. https://www.ciencia-id.pt/8E1C-1F09-1B21 8E1C-1F09-1B21 http://orcid.org/0000-0001-9323-5252 0000-0001-9323-5252 |
| publishDate | 2016 |
| publisher.none.fl_str_mv | Nova SBE |
| repo_facet_str | urn:repositoryAcronym:run{{{_:::_}}}Repositório Institucional da UNL |
| reponame_str | Repositório Institucional da UNL |
| repository_id_str | urn:repositoryAcronym:run |
| service_str_mv | urn:repositoryAcronym:run |
| spelling | engNova SBEpt_PTFixed-term contracts (FTCs) may be an important tool to promote hirings and employment, particularly in recessions or when permanent contracts are costly. Therefore, it may be useful to let some of the legal parameters of FTCs (as well as those of other labour market institutions) vary systematically over the business cycle, namely increasing their flexibility during downturns. We evaluate this idea by examining the short-term effects of a new law introduced in Portugal, in the midst of a recession, which increased the maximum duration of FTCs from three to four and a half years. Our analysis is based on regression-discontinuity (and difference-in-differences) methods, applied to matched panel data. We find a considerable take up of this measure, as conversions to permanent contracts drop by 20%. Moreover, while we do not detect significant effects on employment status in the subsequent year, worker churning is reduced significantly, as mobility of eligible fixed-term workers to other firms drops by 10%.application/pdfpt_PTShould the maximum duration of fixed-term contracts increase in recessions? Evidence from a law reformPersonalMartins, Pedro S.DSpacehttp://dspace.org/items/7bd30edc-6858-4098-97ac-9e039a5c5af6DSpacehttp://dspace.org/items/7bd30edc-6858-4098-97ac-9e039a5c5af6MartinsPedroCiência IDhttps://www.ciencia-id.pt8E1C-1F09-1B21ORCIDhttp://orcid.org0000-0001-9323-5252Researcher IDhttps://www.researcherid.comB-6059-2009Researcher IDhttps://www.researcherid.comB-6059-2009Scopus Author IDhttps://www.scopus.com18037738900HostingInstitutionOrganizationalRUNe-mailmailto:run@unl.ptrun@unl.pt2019-09-30T15:21:06Z2016-09-062016-09-06T00:00:00ZHandlehttp://hdl.handle.net/10362/82738http://purl.org/coar/access_right/c_abf2open accessEmployment lawWorker mobilitySegmentationCounterfactual evaluation572327 bytesother research producthttp://purl.org/coar/resource_type/c_8042working paperhttp://purl.org/coar/access_right/c_abf2application/pdffulltexthttps://run.unl.pt/bitstreams/5b6846f8-3303-4ad9-bf76-bffceb28cdcd/download |
| spellingShingle | Should the maximum duration of fixed-term contracts increase in recessions? Evidence from a law reform Martins, Pedro S. Employment law Worker mobility Segmentation Counterfactual evaluation |
| status | SINGLETON |
| subject.fl_str_mv | Employment law Worker mobility Segmentation Counterfactual evaluation |
| title | Should the maximum duration of fixed-term contracts increase in recessions? Evidence from a law reform |
| title_full | Should the maximum duration of fixed-term contracts increase in recessions? Evidence from a law reform |
| title_fullStr | Should the maximum duration of fixed-term contracts increase in recessions? Evidence from a law reform |
| title_full_unstemmed | Should the maximum duration of fixed-term contracts increase in recessions? Evidence from a law reform |
| title_short | Should the maximum duration of fixed-term contracts increase in recessions? Evidence from a law reform |
| title_sort | Should the maximum duration of fixed-term contracts increase in recessions? Evidence from a law reform |
| topic | Employment law Worker mobility Segmentation Counterfactual evaluation |
| topic_facet | Employment law Worker mobility Segmentation Counterfactual evaluation |
| url | http://hdl.handle.net/10362/82738 |
| visible | 1 |