Fixed-term contracts and the duration distribution of unemployment

In the mid-1980s, many European countries introduced fixed-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 cross-sectional 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 fixed-term contracts. I find 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.Cross-sectional data, duration model, turnover

Fixed-Term Contracts and the Duration Distribution of Unemployment

In the mid-1980s, many European countries introduced fixed-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 cross-sectional 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 fixed-term contracts. I find 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.cross-sectional data, duration model, turnover

Employment Protection and Unemployment in an Efficiency Wage Model

Firing costs are often blamed for unemployment. This paper investigates this well spread belief. The main points are two. First, firing costs are modelled in an efficiency wage model to capture their effects on employment through wages. Secondly, dismissal conflicts are modelled explicitly. In the context of imperfectly observable effort, a double moral hazard problem can arise and in turn firing costs reduced employment because they increase the rent to be paid to workers. The determinants of the double moral hazard problem such as the imprecise definition of dismissal causes are analysed. The main policy conclusion is that focus should move onto the clarification of the different causes of dismissal to minimise the room of interpretation. If so, then high enough severance payments in case of 'unfair' dismissals can actually have a punishment role and prevent the double moral hazard problem.Firing costs, efficiency wages, "unfair" dismissal

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

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.Fixed-term contracts, duration models

Estimating the probability of leaving unemployment using uncompleted spells from repeated cross-section data

We propose a new econometric estimation method for analyzing the probability of leaving unemployment using uncompleted spells from repeated cross-section data, which can be especially useful when panel data are not available. The proposed method-of-moments-based estimator has two important features: (1) it estimates the exit probability at the individual level and (2) it does not rely on the stationarity assumption of the inflow composition. We illustrate and gauge the performance of the proposed estimator using the Spanish Labor Force Survey data, and analyze the changes in distribution of unemployment between the 1980s and 1990s during a period of labor market reform. We find that the relative probability of leaving unemployment of the short-term unemployed versus the long-term unemployed becomes significantly higher in the 1990s.Repeated cross-section data. GMM, duration analysis, unemployment

Essential plasticity and redundancy of metabolism unveiled by synthetic lethality analysis

We unravel how functional plasticity and redundancy are essential mechanisms underlying the ability to survive of metabolic networks. We perform an exhaustive computational screening of synthetic lethal reaction pairs in Escherichia coli in a minimal medium and we find that synthetic lethal pairs divide in two different groups depending on whether the synthetic lethal interaction works as a backup or as a parallel use mechanism, the first corresponding to essential plasticity and the second to essential redundancy. In E. coli, the analysis of pathways entanglement through essential redundancy supports the view that synthetic lethality affects preferentially a single function or pathway. In contrast, essential plasticity, the dominant class, tends to be inter-pathway but strongly localized and unveils Cell Envelope Biosynthesis as an essential backup for Membrane Lipid Metabolism. When comparing E. coli and Mycoplasma pneumoniae, we find that the metabolic networks of the two organisms exhibit a large difference in the relative importance of plasticity and redundancy which is consistent with the conjecture that plasticity is a sophisticated mechanism that requires a complex organization. Finally, coessential reaction pairs are explored in different environmental conditions to uncover the interplay between the two mechanisms. We find that synthetic lethal interactions and their classification in plasticity and redundancy are basically insensitive to medium composition, and are highly conserved even when the environment is enriched with nonessential compounds or overconstrained to decrease maximum biomass formation.Comment: 22 pages, 4 figure

Gender Gaps in Unemployment Rates in OECD Countries

There is an enormous literature on gender gaps in pay and labour market participation but virtually noliterature on gender gaps in unemployment rates. Although there are some countries in which there isessentially no gender gap in unemployment, there are others in which the female unemployment rate issubstantially above the male. Although it is easy to give plausible reasons for why more women than menmay decide not to want work, it is not so obvious why, once they have decided they want a job, women insome countries are less likely to be in employment than men. This is the subject of this paper. We showthat, in countries where there is a large gender gap in unemployment rates, there is a gender gap in bothflows from employment into unemployment and from unemployment into employment. We investigatedifferent hypotheses about the sources of these gaps. Most hypotheses find little support in the data and thegender gap in unemployment rates (like the gender gap in pay) remains largely unexplained. But it doesseem to correlate with attitudes on whether men are more deserving of work than women so thatdiscrimination against women may explain part of the gender gap in unemployment rates in theMediterranean countries.Gender Gap, Unemployment Rates