Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/195284 
Year of Publication: 
2016
Citation: 
[Journal:] SERIEs - Journal of the Spanish Economic Association [ISSN:] 1869-4195 [Volume:] 7 [Issue:] 4 [Publisher:] Springer [Place:] Heidelberg [Year:] 2016 [Pages:] 421-459
Publisher: 
Springer, Heidelberg
Abstract: 
This paper analyzes how changes in the firing-costs gap between permanent and temporary workers affect firms' TFP in a dual labour market. We argue that, under plausible conditions, firms' temp-to-perm conversion rates go down when this gap increases. Temporary workers respond to lower conversion rates by exerting less effort, while firms react by providing less paid-for training. Both channels lead to a decline in TFP. We test these implications in a large panel of Spanish manufacturing firms from 1991 to 2005, looking at the effects of three labour market reforms which entailed substantial changes in the firing-costs gap. Our empirical findings provide some support for the above-mentioned mechanism.
Subjects: 
Firms' TFP
Workers' effort
Training
Temporary contracts
Firing costs
JEL: 
C14
C52
D24
J24
J41
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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