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The effect of trial periods in employment on firm hiring behavior

Isabelle Sin
Isabelle Sin
 y 
Nathan Chappell
Nathan Chappell
   | 02 sept 2020
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Publicado en línea: 02 sept 2020
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DOI: https://doi.org/10.2478/izajolp-2020-0009
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© 2020 Isabelle Sin, Nathan Chappell, published by Sciendo
This work is licensed under the Creative Commons Attribution 4.0 International License.

Figure 1

Theoretical prediction of trial period policy impact on whether to hire.Notes: Area A represents μ-σ combinations such that the applicant will not be hired whether or not trial periods are available; applicants in area B will be hired only when trial periods are available and then will be hired with a trial period; applicants in area C will be hired regardless of trial period legislation and hired on a trial period when available; and applicants in area D will always be hired and never with a trial period. A value of 0.5 is used for the cost of using trial periods, and the discount rate is δ = 0.1.
Theoretical prediction of trial period policy impact on whether to hire.Notes: Area A represents μ-σ combinations such that the applicant will not be hired whether or not trial periods are available; applicants in area B will be hired only when trial periods are available and then will be hired with a trial period; applicants in area C will be hired regardless of trial period legislation and hired on a trial period when available; and applicants in area D will always be hired and never with a trial period. A value of 0.5 is used for the cost of using trial periods, and the discount rate is δ = 0.1.

Figure 2

Theoretical prediction of trial period policy, heterogeneous effects.Notes: This figure shows how the effects of trial period policy differ for firms with different discount rates. The blue lines (dashed and solid) denote a discount rate of 0.1, and the red lines (dash-dotted and dotted) denote a discount rate of 0.4. See further notes in Figure 1.
Theoretical prediction of trial period policy, heterogeneous effects.Notes: This figure shows how the effects of trial period policy differ for firms with different discount rates. The blue lines (dashed and solid) denote a discount rate of 0.1, and the red lines (dash-dotted and dotted) denote a discount rate of 0.4. See further notes in Figure 1.

Figure 3

Substitution toward riskier applicants with trial periods.Notes: This figure compares applicant a, with expected profitability of 0.5 and a standard deviation of profitability of 0.5, with applicant b, whose μ and σ are plotted on the two axes. Area A gives the μ-σ combinations for applicant b such that applicant a is hired regardless of whether trial periods are available; area B gives the combination such that applicant a is hired when trial periods are not available and applicant b is hired when trial periods are available; and area C gives the combinations such that applicant b is hired regardless of whether trial periods are available. The equation comes from the theoretical model in Section 3.2. A value of 0.5 is used for the cost of using trial periods, and the discount rate is δ = 0.1.
Substitution toward riskier applicants with trial periods.Notes: This figure compares applicant a, with expected profitability of 0.5 and a standard deviation of profitability of 0.5, with applicant b, whose μ and σ are plotted on the two axes. Area A gives the μ-σ combinations for applicant b such that applicant a is hired regardless of whether trial periods are available; area B gives the combination such that applicant a is hired when trial periods are not available and applicant b is hired when trial periods are available; and area C gives the combinations such that applicant b is hired regardless of whether trial periods are available. The equation comes from the theoretical model in Section 3.2. A value of 0.5 is used for the cost of using trial periods, and the discount rate is δ = 0.1.

Figure 4

New hires as a percentage of total employees by firm size.Notes: Values are 3-month moving averages. Vertical gray lines indicate the policy changes.
New hires as a percentage of total employees by firm size.Notes: Values are 3-month moving averages. Vertical gray lines indicate the policy changes.

Figure 5

Policy effect on the number of new hires, varying firm sizes included. Panel A1: Policy effect, no cutout. Panel A2: Placebo test, no cutout. Panel B1: Policy effect, excluding firms sized 19–20. Panel B2: Placebo test, excluding firms sized 19–20. Panel C1: Policy effect, excluding firms sized 18–21 Panel C2: Placebo test, excluding firms sized 18–21.Notes: The figure plots estimated policy effects and their 95% confidence intervals (left-hand panels) and placebo policy effects and their 95% confidence intervals (right-hand panels), varying the range of firm sizes in the sample. The policy effect is the coefficient on between * small firm from the corresponding specifications in Table A1 in Appendix. The placebo tests plot the coefficients on post * small firm. See Table A1 in Appendix for details.
Policy effect on the number of new hires, varying firm sizes included. Panel A1: Policy effect, no cutout. Panel A2: Placebo test, no cutout. Panel B1: Policy effect, excluding firms sized 19–20. Panel B2: Placebo test, excluding firms sized 19–20. Panel C1: Policy effect, excluding firms sized 18–21 Panel C2: Placebo test, excluding firms sized 18–21.Notes: The figure plots estimated policy effects and their 95% confidence intervals (left-hand panels) and placebo policy effects and their 95% confidence intervals (right-hand panels), varying the range of firm sizes in the sample. The policy effect is the coefficient on between * small firm from the corresponding specifications in Table A1 in Appendix. The placebo tests plot the coefficients on post * small firm. See Table A1 in Appendix for details.

Figure 6

Time-varying estimate of policy effect on number of new hires.Notes: This figure plots the point estimate and 95% confidence interval of the coefficient on date*small firm in a regression that replicates column 4 in Panel A of Table A1 in Appendix, but allows the difference between small and large firms to vary each 3-month period.
Time-varying estimate of policy effect on number of new hires.Notes: This figure plots the point estimate and 95% confidence interval of the coefficient on date*small firm in a regression that replicates column 4 in Panel A of Table A1 in Appendix, but allows the difference between small and large firms to vary each 3-month period.

Policy effect on the number of new hires, varying firm sizes included

Dependent variableNumber of new hires
Firm sizes included:18–2117–2216–2315–2410–50
Between * small firm0.0080.0090.0090.0080.012
(0.019)(0.017)(0.015)(0.014)(0.009)
Post * small firm-0.005-0.0020.0030.0000.010
(0.017)(0.015)(0.014)(0.013)(0.010)
Small firm-0.014-0.000-0.018-0.014-0.016*
(0.016)(0.013)(0.012)(0.011)(0.009)
Observations314,637478,503650,934835,3622,495,838
Firm sizes included:17–18, 21–2216–18, 21–2315–18, 21–2410–18, 21–50
Between * small firm0.0300.0240.0190.016*
(0.020)(0.017)(0.015)(0.010)
Post * small firm0.0100.0120.0060.013
(0.018)(0.016)(0.015)(0.010)
Small firm0.032-0.032-0.020-0.019*
(0.028)(0.019)(0.016)(0.010)
Observations322,119494,553678,9782,339,457
Firm sizes included:16–17, 22–2315–17, 22–2410–17, 22–50
Between * small firm0.0090.0060.014
(0.020)(0.017)(0.010)
Post * small firm0.0080.0010.013
(0.019)(0.017)(0.010)
Small firm-0.126***-0.043*-0.022*
(0.039)(0.025)(0.012)
Observations336,297520,7252,181,201

Substitution between trial periods and temporary contracts

Dependent variableOn temporary contract, 2012On temporary contract, 2012On trial period, 2012On trial period, 2012On temporary contract, 2008On temporary contract, 2008
Predicted probability of temporary contract from 2008 data, parsimonious1.156***–1.436***
(0.220)(0.223)
Predicted probability of temporary contract from 2008 data, full controls1.364***–1.230***
Predicted probability of trial period from 2012 data, parsimonious(0.151)(0.147)–0.270**
Predicted probability of trial period from 2012 data, full controls(0.135)–0.521***
(0.086)
Year201220122012201220082008
Observations2,3972,3852,3972,3851,6861,686
R-Squared0.0140.0430.0150.0250.0030.023
Mean of dependent variable0.2070.2070.3760.3750.2000.200

Policy effect on long-term hires and employees moving between firms

Dependent variableNew hires who lasted 5+ monthsNew hires who were employed elsewhere previous month
Between * small firm0.006-0.002
(0.015)(0.017)
Post * small firm0.006-0.003
(0.014)(0.015)
Small firm-0.013-0.016
(0.012)(0.013)
Firm size (ln)1.000***0.948***
(0.037)(0.041)
Month-in-year fixed effectsYesYes
Calendar month * lvl 3 industry fixed effectsYesYes
Observations835,362835,362
% of nonzero hires of given type30.1%29.8%

Policy effect for very small firms

Negative binomial regression
Dependent variable: Number of new hires
Between * size 1–4-0.003
(0.016)
Between * size 5–90.015
(0.016)
Between * size 10–140.017
(0.016)
Between * size 15–190.003
(0.017)
Between * size 25–290.015
(0.020)
Post * size 1–4-0.013
(0.014)
Post * size 5–9-0.005
(0.015)
Post * size 10–14-0.014
(0.015)
Post * size 15–19-0.004
(0.015)
Post * size 25–29-0.028
(0.018)
Observations15,423,435
% of nonzero hires15.9%

Policy effect on the distribution of employment duration of new hires

Dependent variable: Indicator for employment lasting at least2 months2 months5 months12 months24 months
Between * small firm0.0030.002-0.002-0.001-0.002
(0.002)(0.002)(0.003)(0.002)(0.002)
Post * small firm0.007**0.006**0.000-0.003-0.001
(0.003)(0.003)(0.004)(0.003)(0.003)
Small firm-0.001-0.003-0.003-0.001-0.002
(0.002)(0.002)(0.002)(0.002)(0.002)
Firm size (ln)0.026***0.014**0.029***0.025***0.015***
(0.006)(0.006)(0.008)(0.007)(0.005)
Plant size (ln)-0.015***-0.013***-0.019***-0.009***-0.005***
(0.001)(0.001)(0.002)(0.001)(0.001)
Age0.013***0.018***0.015***0.012***
(0.000)(0.000)(0.000)(0.000)
Age squared (per 100)-0.015***-0.020***-0.016***-0.012***
(0.000)(0.000)(0.000)(0.000)
Female0.007***0.006***-0.006***-0.011***
(0.001)(0.001)(0.001)(0.001)
On jobseeker benefit in previous year-0.026***-0.071***-0.070***-0.051***
(0.002)(0.002)(0.002)(0.001)
On sole parent benefit in previous year-0.027***-0.051***-0.053***-0.040***
(0.003)(0.003)(0.003)(0.002)
On supported living benefit in previous year-0.056***-0.090***-0.082***-0.056***
(0.005)(0.006)(0.004)(0.003)
On other benefit type in previous year-0.031***-0.055***-0.055***-0.035***
(0.003)(0.004)(0.003)(0.002)
Recent migrant0.001-0.033***-0.040***-0.032***
(0.002)(0.002)(0.002)(0.001)
No wage or salary income in previous year0.017***0.041***0.045***0.034***
(0.001)(0.002)(0.001)(0.001)
Worked at a different firm the previous month0.015***0.046***0.055***0.040***
(0.001)(0.001)(0.001)(0.001)
Maori-0.012***-0.028***-0.027***-0.020***
(0.001)(0.002)(0.001)(0.001)
Pasifika-0.009***-0.016***-0.015***-0.007***
(0.002)(0.002)(0.002)(0.002)
Asian0.004*0.007***-0.002-0.005***
(0.002)(0.002)(0.002)(0.002)
Other ethnicity-0.006***-0.012***-0.010***-0.008***
(0.002)(0.002)(0.002)(0.002)
Education leaver (in past year)0.021***0.027***0.021***0.009***
(0.001)(0.002)(0.002)(0.001)
Month-in-year fixed effectsYesYesYesYesYes
Calendar month * lvl 3 industry fixed effectsYesYesYesYesYes
Observations723,084671,073671,073671,073671,073
% of hires of given type76.8%77.8%48.3%26.0%14.2%
R-squared0.1180.1250.1460.1230.099

Policy effect on the probability a new hire was a disadvantaged jobseeker

Dependent variable: Indicator for hire typeBeneficiary in past yearJobseeker beneficiary in past yearNot worked in past yearRecent migrantUnder 25 years oldMaori or Pasifika under 25Education leaver
Between * small firm0.0030.0030.004–0.003–0.003–0.000–0.001
(0.003)(0.002)(0.003)(0.004)(0.004)(0.002)(0.002)
Post * small firm0.0050.0030.005*–0.0010.0030.0010.002
(0.003)(0.002)(0.003)(0.004)(0.004)(0.002)(0.002)
Small firm–0.001–0.001–0.003–0.0040.003–0.0020.000
(0.002)(0.002)(0.003)(0.003)(0.003)(0.002)(0.002)
Firm size (ln)–0.0020.001–0.0020.0090.004–0.0040.002
(0.007)(0.006)(0.008)(0.010)(0.009)(0.006)(0.005)
Plant size (ln)–0.0020.0000.004*0.0010.013***0.009***–0.004***
(0.002)(0.002)(0.002)(0.003)(0.003)(0.002)(0.001)
Month-in-year fixed effectsYesYesYesYesYesYesYes
Calendar month * 3-digit industry fixed effectsYesYesYesYesYesYesYes
Observations893,292893,292893,292893,292890,352890,352770,415
% hires of given type18.211.424.918.241.69.712.1
R-Squared0.0300.0310.0350.0920.1220.0270.010

Test for parallel trends in the pre-announcement period

Dependent variableNumber of new hires
Time trend * small firm0.0002
(0.0005)
Time trend-0.0087
(0.0054)
Small firm-0.0143
(0.0181)
Log of firm size0.9632***
(0.0448)
Calendar month * level 3 industry fixed effectsYes
Observations359,046

Heterogeneous policy effects on the probability a new hire was a disadvantaged jobseeker

Dependent variable: Indicator for hire typeBeneficiary in past yearJobseeker beneficiary in past yearNot worked in past yearRecent mi-grantUnder 25 years oldMaori or Pasifika under 25 years oldEducation leaver
Panel A: Trial period use, employee training, permanent contract use, and long-term jobs
Between * small firm * proportion of0.0190.023–0.058**–0.0280.001–0.008–0.046**
jobs starting on trial period(0.023)(0.019)(0.026)(0.022)(0.028)(0.018)(0.020)
Post * small firm * proportion of jobs0.048**0.046***–0.023–0.075***–0.0120.010–0.022
starting on trial period(0.021)(0.017)(0.023)(0.020)(0.025)(0.016)(0.022)
Observations873,837873,837873,837873,837870,972873,837754,212
Mean proportion of jobs in industry on a trial period0.2250.2250.2250.2250.2250.2250.224
Between * small firm * proportion of–0.005–0.007–0.002–0.062***0.0340.004–0.012
jobs with no training(0.017)(0.014)(0.019)(0.017)(0.021)(0.013)(0.015)
Post * small firm * proportion of jobs with–0.0040.002–0.006–0.042***0.020–0.002–0.001
no employer-funded training(0.016)(0.013)(0.018)(0.015)(0.019)(0.012)(0.017)
Observations884,805884,805884,805884,805881,901884,805763,449
Mean proportion of jobs with no employer-funded training0.7440.7440.7440.7440.7440.7440.743
Between * small firm * proportion of0.0590.084**0.0310.185***–0.0350.019–0.086**
jobs starting on permanent contract(0.041)(0.034)(0.046)(0.040)(0.051)(0.032)(0.035)
Post * small firm * proportion of jobs0.089**0.062**–0.0100.094***–0.0390.055**–0.076**
starting on permanent contract(0.036)(0.029)(0.040)(0.035)(0.044)(0.027)(0.038)
Observations884,805884,805884,805884,805881,901884,805763,449
Mean proportion of jobs starting on permanent contract0.8910.8910.8910.8910.8910.8910.891
Between * small firm * proportion of0.033**0.041***–0.0080.053***–0.0200.013–0.013
jobs lasting 5+ months(0.015)(0.012)(0.017)(0.014)(0.018)(0.011)(0.013)
Post * small firm * proportion of jobs0.045***0.031***0.0110.013–0.029*0.019*–0.018
lasting 5+ months(0.013)(0.011)(0.015)(0.013)(0.016)(0.010)(0.014)
Observations893,259893,259893,259893,259890,319893,259770,415
Mean proportion of jobs lasting 5+ months0.4480.4480.4480.4480.4480.4480.449
Panel B: Seasonality and firm growth
Between * small firm * seasonality of–0.003–0.007*0.001–0.001–0.000–0.0010.006
industry(0.005)(0.004)(0.005)(0.004)(0.006)(0.004)(0.004)
Post * small firm * seasonality of industry–0.010**–0.008**0.0020.009**–0.002–0.005*0.008**
(0.004)(0.003)(0.005)(0.004)(0.005)(0.003)(0.004)
Observations893,040893,040893,040893,040890,100893,040770,241
Mean seasonality of industry1.5781.5781.5781.5781.5781.5781.578
Standard deviation of seasonality of industry0.4720.4720.4720.4720.4720.4720.472
Between * small firm * firm growth over–0.000–0.0010.005**–0.003*–0.001–0.001–0.000
previous 12 months(0.002)(0.002)(0.002)(0.002)(0.002)(0.001)(0.002)
Post * small firm * recent firm growth0.005**0.003*0.004*–0.0010.003–0.0000.001
(0.002)(0.002)(0.002)(0.002)(0.003)(0.002)(0.002)
Observations720,147720,147720,147720,147717,873720,147605,694
Mean firm growth over previous 12 months0.1980.1980.1980.1980.1980.1980.195
Standard deviation of Firm growth over previous 12 months1.3861.3861.3861.3861.3821.3861.417

Distribution of employment and hiring over firm sizes

Firm size categoryFirms with 0–14 employeesFirms with 15–19 employeesFirms with 20–24 employeesFirms with 25+ employees
Average employment (employee–firm matches)570,10080,50059,4001,363,000
% of total employment27.5%3.9%2.9%65.8%
Average number of firms employing in a month135,7344,8032,7239,278
% of total firm months89.0%3.1%1.8%6.1%
Count of all hires6,611,700799,500590,9008,796,100
% of all hires39.4%4.8%3.5%52.4%
Count of new hires3,948,500512,100381,2005,439,200
% of new hires38.4%5.0%3.7%52.9%

Policy effect on the total number of new hires, robustness checks

Robustness checkExcluding anomalous industriesExcluding firm months with extremely high hiringMeasuring firm size excluding all working proprietorsInteract small firm with GDPOLS regressionOLS regressionOLS regression
Dependent variableNumber of new hiresNumber of new hiresNumber of new hiresNumber of new hiresDummy for any new hiresLog (new hires +1)Percentage change in employment (%)
Between * small firm0.0180.0120.0050.0160.0060.019***–0.093
(0.015)(0.012)(0.012)(0.017)(0.004)(0.005)(0.093)
Post * small firm0.0060.0010.0020.0100.0040.013***0.021
(0.014)(0.011)(0.012)(0.024)(0.004)(0.005)(0.083)
Small firm–0.021*0.001–0.0080.023–0.002–0.011***–0.045
(0.012)(0.009)(0.010)(0.082)(0.003)(0.004)(0.083)
Firm size (ln)0.952***1.023***0.941***0.930***0.258***0.359***–0.360
(0.036)(0.028)(0.030)(0.034)(0.009)(0.011)(0.236)
Month-in-year fixed effectsYesYesYesYesYesYesYes
Calendar month * 3-digit industry fixed effectsYesYesYesYesYesYesYes
Small firm*quarterly GDP interaction Observations781,725827,883810,189Yes835,362835,362835,362824,547
% with nonzero-dependent variable45.8%46.1%61.6%46.6%46.6%46.6%62.6%

Policy effect on the distribution of employment duration of different hire types

Dependent variable: Indicator for employment lasting at least:2 months5 months12 months24 months
Panel A: Beneficiaries, jobseekers, nonworkers, and migrants
Recent beneficiary hires
Between * small firm-0.002-0.002-0.001-0.001
(0.005)(0.006)(0.005)(0.004)
Post * small firm0.006-0.008-0.012*-0.005
(0.007)(0.008)(0.007)(0.005)
Small firm-0.0020.0040.0050.002
(0.005)(0.006)(0.005)(0.003)
Observations129,507129,507129,507129,507
Recent jobseeker hires
Between * small firm-0.001-0.0040.0040.003
(0.007)(0.008)(0.006)(0.005)
Post * small firm0.002-0.013-0.010-0.008
(0.008)(0.010)(0.008)(0.006)
Small firm0.0050.0090.0060.007
(0.006)(0.007)(0.006)(0.004)
Observations80,90480,90480,90480,904
Recent nonworking hires
Between * small firm-0.000-0.003-0.002-0.002
(0.005)(0.006)(0.005)(0.004)
Post * small firm0.0100.001-0.009-0.005
(0.006)(0.007)(0.007)(0.005)
Small firm-0.002-0.0060.0030.000
(0.004)(0.005)(0.005)(0.004)
Observations147,909147,909147,909147,909
Recent migrant hires
Between * small firm0.0040.003-0.007-0.005
(0.006)(0.008)(0.006)(0.005)
Post * small firm-0.002-0.015-0.018**-0.013**
(0.008)(0.010)(0.008)(0.007)
Small firm0.0020.0080.012**0.009**
(0.006)(0.007)(0.006)(0.005)
Observations84,78084,78084,78084,780
Panel B: Youth, young Māori and Pasifika, and education-leaver hires
Young (under 25 years) hires
Between * small firm0.007*-0.0010.001-0.002
(0.004)(0.004)(0.004)(0.003)
Post * small firm0.005-0.003-0.005-0.005
(0.005)(0.006)(0.005)(0.004)
Small firm-0.005-0.001-0.0030.000
(0.003)(0.004)(0.003)(0.002)
Observations274,461274,461274,461274,461
Young Māori and Pasifika hires
Between * small firm0.007-0.003-0.0000.004
(0.008)(0.009)(0.007)(0.005)
Post * small firm-0.005-0.014-0.009-0.009
(0.010)(0.012)(0.009)(0.007)
Small firm0.0040.003-0.0060.001
(0.007)(0.008)(0.006)(0.004)
Observations70,12870,12870,12870,128
Recent education-leaver hires
Between * small firm0.004-0.0040.004-0.001
(0.006)(0.008)(0.007)(0.006)
Post * small firm0.003-0.013-0.013-0.001
(0.008)(0.010)(0.009)(0.007)
Small firm-0.0080.0060.004-0.001
(0.006)(0.007)(0.006)(0.005)
Observations87,81387,81387,81387,813

Distribution of contract type for new hires in 2012

Type of contractPermanent contract with a trial period (%)Permanent contract without a trial period (%)Temporary contract (%)
% of new hires37.641.720.7

Descriptive statistics for treatment and control firms by period

Firms with 15–19 employeesFirms with 20–24 employees
Period relative to policy changesPreBetweenPostPreBetweenPost
Average number of firms employing each month4,8844,7104,7532,7542,6482,733
Average firm size16.816.816.821.821.821.8
% of firms with multiple plants13.8%13.7%13.3%17.7%18.0%16.8%
% of firm months hiring anyone60.6%54.0%55.7%67.6%61.4%62.8%
% of firm months hiring a nonseasonal employee49.1%42.2%44.2%56.4%49.2%51.1%
% of firm months hiring a new employee47.3%40.0%42.3%52.7%46.8%49.1%
Average number of new hires per firm month1.10.90.91.41.21.2
Among firm months that hired a new employee
Average number of new hires2.22.22.12.52.52.4
    25th percentile of number of hires111111
    50th percentile of number of hires111211
    75th percentile of number of hires222333
Among new hires,% who
    Stayed with the firm for 5+ months45.1%47.1%49.1%45.3%46.5%49.3%
    Received benefit income in previous year17.1%18.1%20.1%17.2%18.3%19.6%
    Received jobseeker benefit income in previous year10.2%12.2%13.2%10.2%12.2%12.7%
    Had not worked in the past year23.4%25.3%27.6%23.1%25.0%26.7%
    Arrived in New Zealand on a visa in the past 2 years16.2%19.0%20.3%16.4%20.0%20.8%
    Are <25 years old43.1%40.3%42.3%41.3%38.9%40.1%
    Are Maori or Pasifika and <25 years old10.2%8.7%9.2%10.3%8.8%9.1%
    Left education in the previous year12.6%11.1%11.2%12.6%11.1%10.9%
    Had a job elsewhere the previous month51.4%47.3%47.6%51.6%47.6%48.3%

Policy effect on the probability a new hire was a disadvantaged jobseeker, varying firm-size band

Dependent variable: Indicator for hire typeBeneficiary in past yearJobseeker beneficiary in past yearNot worked in past yearRecent migrantUnder 25 years oldMaori or Pasifika under 25Education leaver
Firms sized 18–21
Between * small firm0.0010.0040.0040.005–0.005–0.007*–0.004
(0.004)(0.004)(0.005)(0.006)(0.005)(0.003)(0.003)
Post * small firm0.0010.0030.0020.006–0.009*–0.006**0.004
(0.004)(0.003)(0.004)(0.006)(0.005)(0.003)(0.003)
Small firm0.001–0.0020.003–0.009*0.011**0.0010.003
(0.004)(0.003)(0.005)(0.005)(0.005)(0.003)(0.003)
Observations350,265350,265350,265350,265349,173349,173302,172
Firms sized 10–50
Between * small firm0.005**0.004**–0.0010.0010.0010.0020.001
(0.002)(0.002)(0.002)(0.003)(0.003)(0.002)(0.001)
Post * small firm0.001–0.0000.004*0.0040.002–0.0010.003**
(0.002)(0.002)(0.002)(0.004)(0.003)(0.002)(0.001)
Small firm–0.001–0.0000.002–0.0020.002–0.002–0.000
(0.002)(0.001)(0.002)(0.003)(0.002)(0.002)(0.001)
Observations2,728,6682,728,6682,728,6682,728,6682,719,9952,719,9952,352,420
Firms sized 15–24, excluding 19–20
Between * small firm0.0050.0040.002–0.006–0.0020.002–0.000
(0.003)(0.003)(0.004)(0.005)(0.004)(0.003)(0.002)
Post * small firm0.0050.0030.006*–0.0030.0060.003–0.000
(0.003)(0.003)(0.003)(0.005)(0.004)(0.002)(0.002)
Small firm–0.003–0.000–0.005–0.001–0.000–0.003–0.001
(0.003)(0.003)(0.004)(0.005)(0.004)(0.003)(0.003)
Observations718,575718,575718,575718,575716,181716,181619,950
Firms sized 10–50, excluding 18–21
Between * small firm0.005**0.004**–0.0020.0010.0020.004**0.002
(0.002)(0.002)(0.002)(0.004)(0.003)(0.002)(0.001)
Post * small firm0.001–0.0010.004**0.0040.003–0.0010.004**
(0.003)(0.002)(0.002)(0.004)(0.003)(0.002)(0.001)
Small firm–0.001–0.0010.004**–0.0010.001–0.002–0.001
(0.003)(0.002)(0.003)(0.004)(0.003)(0.002)(0.001)
Observations2,378,4032,378,4032,378,4032,378,4032,370,8222,370,8222,050,248

Predicting temporary contracts and trial period jobs

Dependent variableOn temporary contract, 2008On temporary contract, 2008On trial period, 2012On trial period, 2012
Aged 50+ years0.0370.022-0.078***-0.067**
(0.028)(0.026)(0.026)(0.026)
Aged 15–24 years0.065***0.083***-0.025-0.050**
(0.025)(0.026)(0.024)(0.025)
Male-0.028-0.0350.0270.005
(0.019)(0.022)(0.020)(0.023)
Degree or higher qualification0.066**0.045-0.182***-0.117***
(0.032)(0.032)(0.025)(0.029)
School qualification0.0030.016-0.011-0.019
(0.026)(0.026)(0.027)(0.027)
No qualification0.011-0.004-0.052*-0.071**
(0.027)(0.026)(0.030)(0.029)
Does not know qualification0.0640.133-0.084-0.082
(0.126)(0.137)(0.139)(0.133)
Professional occupation-0.005-0.085**
(0.037)(0.043)
Technicians and trade0.0480.055
(0.050)(0.045)
Community and personnel0.015-0.003
service(0.040)(0.048)
Clerical and admin0.030-0.040
(0.040)(0.045)
Sales workers0.118**-0.001
(0.054)(0.046)
Machinery operators and0.0510.004
drivers(0.056)(0.055)
Laborers0.087**-0.035
(0.041)(0.042)
Other occupation–0.080 (0.317)
Ethnicity fixed effectsYesYesYesYes
Level 1 industry fixed effectsNoYesNoYes
Observations1,6861,6802,4092,406
Mean of dependent variable0.2000.2010.3760.376

Heterogeneous policy effects, with various interaction variables

Dependent variable: No. of new hiresProportion of jobs in lvl 2 industryProportion of jobs in lvl 2 industry withProportion of jobs in lvl 2 industryProportion of jobs in lvl 2 industrySeasonality of lvl 2 industry (proportion of max to min hires in a season, March 2005– February 2009)Firm growth in employment over
interaction variableusing a trial period (0–1)no employer-funded training (0–1)with a permanent contract (0–1)lasting 5+ months, 2005–2008 (0–1)previous 12 months (decimal)
Between * small firm0.1350.0700.273–0.008–0.060*–0.025*
* interaction variable
(0.139)(0.105)(0.276)(0.107)(0.031)(0.013)
Post * small firm * interaction0.1630.0400.492*0.078–0.088***0.000
variable
(0.138)(0.101)(0.259)(0.101)(0.030)(0.014)
Between * small firm–0.021–0.040–0.2380.0110.097*0.004
(0.035)(0.079)(0.249)(0.053)(0.051)(0.014)
Post * small firm–0.036–0.030–0.443*–0.0380.131***–0.003
(0.034)(0.074)(0.235)(0.051)(0.048)(0.014)
Between * interaction variable–0.570***–0.214**–0.960***–0.338***0.077***0.039***
(0.113)(0.086)(0.238)(0.094)(0.026)(0.010)
Post * interaction variable0.0380.0910.1510.002–0.0140.041***
(0.115)(0.083)(0.231)(0.089)(0.025)(0.012)
Small firm * interaction variable–0.185**–0.125*–0.274–0.0510.053***0.008
(0.089)(0.068)(0.170)(0.067)(0.019)(0.007)
Interaction variable–15.960**5.130**–6.534**–2.339**0.567**0.040***
(7.516)(2.351)(3.114)(1.124)(0.273)(0.006)
Small firm0.0280.0770.2330.011–0.092***–0.013
(0.024)(0.050)(0.154)(0.034)(0.031)(0.012)
Observations817,449826,206826,206835,338834,972716,514
Mean of interaction variable0.2340.7290.9130.5131.4440.129
Standard deviation of interaction0.0810.1150.0500.1240.4100.826
variable

Policy effect on the distribution of employment duration of rehires

Dependent variable: Indicator for employment lasting at least2 months5 months12 months24 months
Between * small firm0.002-0.002-0.001-0.002
(0.002)(0.003)(0.002)(0.002)
Post * small firm0.006**0.000-0.003-0.001
(0.003)(0.004)(0.003)(0.003)
Small firm-0.003-0.003-0.001-0.002
(0.002)(0.002)(0.002)(0.002)
Employee demographic controlsYesYesYesYes
Month-in-year fixed effectsYesYesYesYes
Calendar month * level 3 industry fixed effectsYesYesYesYes
Observations390,963390,963390,963390,963
% hires of given type61.9%35.1%15.3%8.4%
R-squared0.1210.1810.0770.061
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Business and Economics, Political Economics, Microeconomics, Macroecomics, Economic Policy, Mathematics and Statistics for Economists, Econometrics
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