The Effect of Product Market Competition on Job Instability
Ainhoa Aparicio Fenoll
affiliation not provided to SSRN
IZA Discussion Paper No. 5669
This paper assesses the impact of product market competition on job instability as proxied by the use of fixed-term labor contracts. Using both worker data from the Spanish Labor Force Survey and firm data from the Spanish Business Strategies Survey, I show that job instability rises with competition. In particular, a one standard deviation increase in competition in an economic sector decreases the probability that a fixed-term worker gets an open-ended contract within that sector in a given year by more than 30%. The effect is identified by means of exogenous shifts in competition brought about by changes in legislation.
Number of Pages in PDF File: 74
Keywords: fixed-term employment, product market competition, labor contract
JEL Classification: J24, M51, C41, C33, C35, J6, L1working papers series
Date posted: May 9, 2011
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