How binding are legal limits? Transitions from temporary to permanent work in Spain

Citació

  • Labour Economics, 14 (2), 153-183, 2007

Enllaç permanent

Descripció

  • Resum

    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.
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