CAN FIXED-TERM CONTRACTS PUT LOW SKILLED YOUTH ON A BETTER CAREER PATH? EVIDENCE FROM SPAIN

Ignacio Garcia-Perez, J.; Marinescu, Ioana; Vall Castello, Judit

Publicación: ECONOMIC JOURNAL
2019
VL / 129 - BP / 1693 - EP / 1730
abstract
By reducing the commitmentmade by employers, fixed-term contracts can help low-skilled youth find a first job. However, the long-term impact of fixed-term contracts on these workers' careers may be negative. Using Spanish social security data, we analysed the impact of a large liberalisation in the regulation of fixed-term contracts in 1984. Using a cohort regression discontinuity design, we find that over the first 10 years in the labour market, the reform reduced the number of days worked (by 4.9%) and earnings (by 9.8%). Over 27 years of labour market career, yearly earnings losses amount to a persistent 7.3%.

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Green published