Pierre Cahuc, Pauline Carry, Franck Malherbet, Pedro S. Martins, 20 January 2022

In 2009, Portugal restricted the use of fixed-term contracts by firms with over 750 employees. This column finds that while the reform was successful in reducing the number of fixed-term jobs, it did not increase the number of permanent contracts and it decreased employment in large firms. Despite positive spillovers on small firms, the reform reduced total employment and had negative effects on the welfare of employees and unemployed workers.

Christopher Stanton, Catherine Thomas, 15 January 2022

The gig economy and online labour platforms often trade off increased flexibility for lower employment security. This column uses a structural model and data from an online platform to study the effects of counterfactual policies on worker and employer surplus. It finds evidence of significant bid tailoring by workers depending on their application order and shows that employers are highly sensitive to wage bids received on past job postings. Ultimately, it shows that traditional labour market regulations, such as minimum wages or payroll taxes, are likely to harm both the demand and supply side in the online gig economy.

Pavel Chakraborty, Devashish Mitra, Asha Sundaram, 07 December 2021

The global market size of outsourcing doubled between 2000 and 2019. While most studies look at foreign outsourcing, this column uses new data on Indian firms to analyse the effects of increased competition from Chinese imports on the domestic outsourcing of manufacturing jobs. It finds that greater import competition is associated with a significant increase in domestic outsourcing. Additionally, it shows that this effect is only present in Indian states with pro-worker labour regulations. Thus, it highlights the important role of domestic institutions in how firms adapt to globalisation. 

Giuseppe Bertola, Anna Lo Prete, 28 February 2015

The large international imbalances accumulated in the Eurozone have proven difficult to unwind during the recent Crisis. This column argues that market reforms had a role in generating current account imbalances, and that patterns of relative labour market regulation could be equally important in the aftermath of the Crisis.

Antonio Cabrales, Juan Dolado, Ricardo Mora, 05 December 2014

The negative consequences of dual labour markets have been extensively documented, but so far little attention has been paid to their effects on workers’ on-the-job training and cognitive skills. This column discusses evidence from PIAAC – an exam for adults designed by the OECD in 2013. Temporary contracts are associated with a reduction of 8–16 percentage points in the probability of receiving on-the-job training, and this training gap can explain up to half of the gap in numeracy scores between permanent and temporary workers.

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