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Can Fixed-Term Contracts Put Low-Skilled Youth on a Better Career Path? Evidence from Spain

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By reducing the commitment made by employers, fixed-term contracts can help low-skilled youth find a first job. However, the long-term impact of fixed-term contracts on these workers' careers may be negative. Using Spanish social security data, we analysed the impact of a large liberalisation in the regulation of fixed-term contracts in 1984. Using a cohort regression discontinuity design, we find that over the first 10 years in the labour market, the reform reduced the number of days worked (by 4.9%) and earnings (by 9.8%). Over 27 years of labour market career, yearly earnings losses amount to a persistent 7.3%

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GARCÍA-PÉREZ, José Ignacio, MARINESCU, Ioana and VALL CASTELLÓ, Judit. Can Fixed-Term Contracts Put Low-Skilled Youth on a Better Career Path? Evidence from Spain. The Economic Journal. 2019. Vol. 129, num. 620, pags. 1693-1730. ISSN 0013-0133. [consulted: 14 of August of 2026]. Available at: https://hdl.handle.net/2445/155661

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