Moving Towards a Single Labor Contract: Transition vs. Steady State

Nawid Siassi, Juan Dolado and Etienne Lalé ()

VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy from Verein für Socialpolitik / German Economic Association

Abstract: This paper analyzes the optimal design of a single open-ended contract (SOEC) and studies the political economy of moving towards such a SOEC in a dual labour market. We compare two economic environments: one with flexible entry-level jobs and high employment protection at long tenure, and another with a SOEC featuring employment protection levels that increase smoothly with tenure. For illustrative purposes, we specialize the discussion of such choices to Spain. A SOEC has the potential of bringing big time efficiency and welfare gains in a steady-state sense. We also identify winners and losers in the transitional path of such a reform and analyze its political support.

JEL-codes: H29 J33 J65 (search for similar items in EconPapers)
Date: 2015
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Related works:
Working Paper: Moving towards a Single Labour Contract: Transition vs. Steady-state (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc15:112858

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