Working Paper: CEPR ID: DP13475
Authors: Samuel Bentolila; Juan J. Dolado; Juan F. Jimeno
Abstract: This paper provides an overview of recent research on dual labour markets. Theoretical and empirical contributions on the labour-market effects of dual employment protection legislation are revisited, as well as factors behind its resilience and policies geared towards correcting its negative economic and social consequences. The topics covered include the stepping-stone or dead-end nature of temporary contracts, their effects on employment, unemployment, churn, training, productivity growth, wages, and labour market inflows and outflows. The paper reviews both theoretical advances and relevant policy discussions on a very relevant topic in many European countries, in particular in several that had a very poor employment performance during the recent global economic and financial crisis.
Keywords: Dual Labour Markets; Employment Protection; Temporary Contracts; Job Creation; Job Destruction; Churn
JEL Codes: E24; J63; J65
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| employment protection legislation (EPL) (K31) | productivity growth (O49) |
| employment protection legislation (EPL) on open-ended contracts (OECs) (J63) | labour mobility (J61) |
| labour mobility (J61) | job allocation efficiency (J29) |
| job allocation efficiency (J29) | productivity growth (O49) |
| EPL gaps (I24) | conversion rates from fixed-term contracts (FTCs) to open-ended contracts (OECs) (J63) |
| conversion rates from fixed-term contracts (FTCs) to open-ended contracts (OECs) (J63) | unemployment churn (J60) |
| employment protection legislation (EPL) (K31) | job destruction (J63) |
| employment protection legislation (EPL) (K31) | job creation (J68) |
| job destruction and job creation (J63) | unemployment rates (J64) |