Excess worker turnover and fixed-term contracts: causal evidence in a two-tier system

• Autor(a) principal: Centeno, Mário
• Data de Publicação: 2012
• Outros Autores: Novo, Álvaro A.
• Tipo de documento: Artigo
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10400.5/23950
• topic: Portuguese Firms; Workers; Skills; Employment Protection; Contracts

Portuguese firms engage in intense reallocation, most employers simultaneously hire and separate from workers, resulting in high excess worker turnover flows. These flows are constrained by the employment protection gap between open-ended and fixed-term contracts. We explore a reform that increased the employment protection of open-ended contracts and generated a quasi-experiment. The causal evidence points to an increase in the share and in the excess turnover of fixed-term contracts in treated firms. The excess turnover of open-ended contracts remained unchanged. This result is consistent with a high degree of substitution between open-ended and _fixed-term contracts. At the _firm level, we also show that excess turnover is quite heterogeneous and quantify its association with firm, match, and worker characteristics. .