Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/35821 
Year of Publication: 
2008
Series/Report no.: 
IZA Discussion Papers No. 3832
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
This paper evaluates the impact of the widespread use of fixed-term contracts in Spain on firms' TFP, via its effect on workers' effort. We propose a simple analytical framework showing that, under plausible conditions, workers' effort depends positively on their perception (for given level of effort) about firms' willingness to convert fixed-term contracts into permanent ones. We test this implication using manufacturing firm level data from 1991 to 2005 by means of nonparametric tests of stochastic dominance and parametric multivariate regression approaches. Our main findings are that high conversion rates increase firm's productivity while high shares of temporary contracts decrease it. Both effects are quantitatively relevant.
Subjects: 
Temporary workers
workers' effort
firms' TFP
JEL: 
C14
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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