A Nutshell Model of Demand of Permanent vs. Temporary Working Contracts

8 Pages Posted: 2 Apr 2019

See all articles by Bruno Contini

Bruno Contini

University of Turin, Collegio Carlo Alberto, LABORatorio R. Revelli, Centre for Employment Studies, IZA; IZA Institute of Labor Economics

Date Written: February 27, 2019

Abstract

This paper presents a two-period “nutshell” model that explains the composition of labour demand when the labour market is dualistic and workers may be hired via permanent (P) or temporary (T) contracts. The model does not explain the level of labor demand, nor the wage of permanent workers, assumed to be exogenous. This is the main difference with the more sophisticated structural model of Bentolila et al. (2012) where employment and wages are jointly determined. The nutshell model delivers, however, a number of easily testable hypotheses – very relevant for policy – that the structural model does not handle.

Keywords: dual labour markets; labour demand; productivity

JEL Classification: J0, D2, J2, J4, J41,

Suggested Citation

Contini, Bruno, A Nutshell Model of Demand of Permanent vs. Temporary Working Contracts (February 27, 2019). IZA Discussion Paper No. 12135. Available at SSRN: https://ssrn.com/abstract=3343752 or http://dx.doi.org/10.2139/ssrn.3343752

Bruno Contini (Contact Author)

University of Turin, Collegio Carlo Alberto, LABORatorio R. Revelli, Centre for Employment Studies, IZA ( email )

Collegio Carlo Alberto Via Real Collegio
Moncalieri, Turin - Piedmont 10024
Italy
+39 011 840314 (Phone)
+39 011 6702762 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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