In the mid-1980s, many European countries introduced …xed-term contracts. Since then their labor markets have become more dynamic. This paper studies the implications of such reforms for the duration distribution of unemployment, with particular emphasis on the changes in the duration dependence. I estimate a parametric duration model using crosssectional data drawn from the Spanish Labor Force Survey from 1980 to 1994 to analyze the chances of leaving unemployment before and after the introduction of …xed-term contracts. I …nd that duration dependence has increased since such reform. Semi-parametric estimation of the model also shows that for long spells, the probability of leaving unemployment has decreased since such reform
To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.