Does dual employment protection affect TFP? Evidence from Spanish manufacturing firms

Artikel

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: SERIEs - Journal of the Spanish Economic Association ; ISSN: 1869-4195 ; Volume: 7 ; Year: 2016 ; Issue: 4 ; Pages: 421-459 ; Heidelberg: Springer

Classification and Topics

• Classification: Wirtschaft ; Semiparametric and Nonparametric Methods: General ; Model Evaluation, Validation, and Selection ; Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity ; Human Capital; Skills; Occupational Choice; Labor Productivity ; Labor Contracts
• Subject: Firms' TFP ; Workers' effort ; Training ; Temporary contracts ; Firing costs

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Dolado, Juan J. ; Ortigueira, Salvador ; Stucchi, Rodolfo
• Event: Veröffentlichung
• (who): Springer
• (where): Heidelberg
• (when): 2016

Further information

• DOI: doi:10.1007/s13209-016-0150-9
• Handle: http://hdl.handle.net/10419/195284
• Last update: 10.03.2025, 11:44 AM CET