Explaining the Spread of Temporary Jobs and its Impact on Labor Turnover

40 Pages Posted: 29 Apr 2016

See all articles by Pierre Cahuc

Pierre Cahuc

Ecole Polytechnique, Paris

Olivier Charlot

University of Burgundy Franche-Comté

Franck Malherbet

University of Cergy-Pontoise - THEMA; IZA Institute of Labor Economics

Date Written: May 2016

Abstract

This article provides a simple model that explains the choice between permanent and temporary jobs. This model, which incorporates important features of actual employment protection legislations neglected by the economic literature so far, reproduces the main stylized facts about entries into permanent and temporary jobs observed in Continental European countries. We find that job protection has very small effects on total employment but induces large substitution of temporary jobs for permanent jobs, which significantly reduces aggregate production.

Suggested Citation

Cahuc, Pierre and Charlot, Olivier and Malherbet, Franck, Explaining the Spread of Temporary Jobs and its Impact on Labor Turnover (May 2016). International Economic Review, Vol. 57, Issue 2, pp. 533-572, 2016, Available at SSRN: https://ssrn.com/abstract=2772295 or http://dx.doi.org/10.1111/iere.12167

Pierre Cahuc (Contact Author)

Ecole Polytechnique, Paris ( email )

1 rue Descartes
Paris, 75005
France

Olivier Charlot

University of Burgundy Franche-Comté ( email )

1 rue Claude Goudimel
25030 Besancon cedex, DOUBS 25000
France

Franck Malherbet

University of Cergy-Pontoise - THEMA ( email )

33 boulevard du port
F-95011 Cergy-Pontoise Cedex, 95011
France

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

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