<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>This study develops a search and matching model for labour markets with temporary and permanent contracts. It matches empirical patterns of higher matching rates and lower surplus for temporary workers and predicts an increase in separation taxes leads to a fall in the number of new permanent jobs, an increase in their wages, and stable separation rates because temporary workers shield permanent workers from adverse shocks. We find empirical support using a regional French policy experiment, the “Contrat de Transition Professionelle”, which increased separation taxes for recently hired permanent workers in firms with fewer than 1,000 workers.</p>
</abstract>

This study develops a search and matching model for labour markets with temporary and permanent contracts. It matches empirical patterns of higher matching rates and lower surplus for temporary workers and predicts an increase in separation taxes leads to a fall in the number of new permanent jobs, an increase in their wages, and stable separation rates because temporary workers shield permanent workers from adverse shocks. We find empirical support using a regional French policy experiment, the “Contrat de Transition Professionelle”, which increased separation taxes for recently hired permanent workers in firms with fewer than 1,000 workers.

Job Protection — It is Good to be an Insider

IZA Journal of Labor Policy

This work is licensed under the Creative Commons Attribution 4.0 International License.

{"article-title":"Job Protection \u2014 It is Good to be an Insider"}

This study develops a search and matching model for labour markets with temporary and permanent contracts. It matches empirical patterns of higher matching...

Job Protection — It is Good to be an Insider

Published Online: Nov 07, 2023

Page range: -

Received: Jun 26, 2023

DOI: https://doi.org/10.2478/izajolp-2023-0003

Keywords
dual labor markets, dismissal taxes, propensity score matching

© 2023 Markus Gebauer, published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Job Protection — It is Good to be an Insider

Published Online: Nov 07, 2023

Page range: -

Received: Jun 26, 2023

DOI: https://doi.org/10.2478/izajolp-2023-0003

Keywordsdual labor markets, dismissal taxes, propensity score matching

© 2023 Markus Gebauer, published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Keywords
dual labor markets, dismissal taxes, propensity score matching