Labor Market Policies and Employment Duration

Hugo A. Hopenhayn

in Law and Employment

Published by University of Chicago Press

Published in print October 2004 | ISBN: 9780226322827
Published online March 2013 | e-ISBN: 9780226322858 | DOI:
Labor Market Policies and Employment Duration

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Over the last few years, the debate on labor market reform has been at the center of economic policy debate in Argentina. This debate has been fueled by the sustained growth in the unemployment rate observed during the decade. One of the major targets of the attack on labor market regulation has been high dismissal costs. Attempts to reduce dismissal costs for all existing jobs have faced strong opposition. As a compromise, and to stimulate job creation, employment promotion contracts for new jobs were introduced in 1995. These contracts were limited to a fixed term ranging from three months to two years. It is a standard view that the reform stimulated the creation of a large number of these temporary contracts, which currently dominate the flow of new jobs. However, there is now a growing concern about the volatility of these temporary jobs, referred to as junk contracts, and a predominant view that they tend to generate excessive turnover. This chapter studies the effect of this reform on job duration.

Keywords: labor market policies; employment duration; labor market reforms; Argentina; economic policy; unemployment rate

Chapter.  5564 words.  Illustrated.

Subjects: Company and Commercial Law

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