Recepción y manejo de equipo

We proceed analogous to the differences-in-differences (DiD) analysis in the preceding chapter, exclusively relying on the augmented EULFS dataset. We generally perform the same specification checks, varying the window of observation as well as dropping one country at a time and rerunning the analysis. Table 6.6 reports results for average effects of employment protection reforms on temporary employment on the youth labor market.

Table 6.6 Differences-in-differences estimates ("cluster robust" standard errors) of the effect of reforms of employment protection on temporary employment among young people, 15 Western countries, 1992-2006

I. Effect of employment protection on regular contracts (epr)

% on temporary contracts among employed

% on temporary contracts in labor force

% on temporary contracts in population

(C) (T) (C) (T) (C) (T)

δepr 0.035 -0.006 0.033 0.024 0.010 -0.012

(0.018) (0.026) (0.019) (0.028) (0.014) (0.029)

R-sq 0.58 0.55 0.56 0.53 0.53 0.49

N 1152 1152 1152 1152 1152 1152

II. Effect of regulations on the usage of temporary contracts (rtc)

% on temporary contracts among employed

% on temporary contracts in labor force

% on temporary contracts in population

(C) (T) (C) (T) (C) (T)

δ^{rtc -0.035 -0.014 -0.023 -0.015 -0.029 -0.017}

(0.020) (0.032) (0.024) (0.030) (0.024) (0.030)

R-sq 0.58 0.53 0.54 0.51 0.50 0.46

N 1152 1152 1152 1152 1152 1152

Notes: ^*** p<0.01, ^** p<0.05, ^* p<0.1. epr - Employment protection regular contracts, rtc - Regulations on the usage of temporary contracts, the R-squared statistic is the "within R-squared", see notes to Table 2.1Table 6.2

We observe that there is no effect of job security provisions on regular contracts on the incidence of temporary employment. Given the widely varying results that we obtained in the

Employment Protection and Temporary Employment

previous section, this result may not be surprising. However, regarding the effect of regulations on temporary contracts, we obtain no statistically significant effect either, although the estimated effects are consistently negative, which we expected from theory.⁴⁸

The effect of regulations on temporary contracts is sensitive to the country composition.

Dropping Italy turns the effect significant for all three dependent variables. However, after dropping Italy, all significant results are driven by the presence of Belgium. Without Belgium and Italy, none of the results are significant, reproducing the results of the full sample. Since Belgium and Italy are outliers in terms of having experienced comparatively large reforms, and since each country influences the results in opposing directions, we conclude that there is no average effect of reforms of regulations on temporary contracts on the incidence of temporary employment on the youth labor market.

Changing the window of observations does not affect these conclusions.

Next, we test whether the effect of reforms is heterogeneous across demographic groups. In Table 6.7, we report the effect of reforms of job security provisions on regular contracts. As in the preceding analysis, reform effects differ across control variable specifications and dependent variable definitions. There is no evidence of reform effects for any of the education groups. The significant effect for women in the middle column disappears if we drop Spain or prolong the window of observation to include five post-reform years.

48 The control variable specifications differ from the ones adopted in the fixed effects analysis in the preceding section. The control variable based specification in Table 6.4 only contains linear effects, while here we also add nonlinear terms. The trend specification in Table 6.4 does not include the adult outcome variable as

Employment Protection and Temporary Employment

Table 6.7 Differences-in-differences estimates ("cluster robust" standard errors) of the effect of reforms of job security provisions on regular employment contracts on temporary employment among young people, 15 Western countries, 1992-2006, heterogeneous reform effects

% on temporary contracts among employed

% on temporary contracts in labor force

% on temporary contracts in population

δepr (C) (T) (C) (T) (C) (T)

ISCED 0-2 0.014 -0.026 0.017 0.008 -0.003 -0.025

(0.027) (0.047) (0.036) (0.044) (0.029) (0.046)

ISCED 3-4 0.033 -0.011 0.021 0.006 -0.001 -0.030

(0.033) (0.045) (0.036) (0.046) (0.038) (0.054)

ISCED 5-6 -0.003 -0.043 -0.013 -0.016 -0.036 -0.052

(0.019) (0.030) (0.018) (0.029) (0.017) (0.034)

Women 0.041 0.041 0.049^** 0.049^** 0.046 0.046

(0.025) (0.024) (0.020) (0.020) (0.029) (0.029)

R-sq 0.58 0.55 0.57 0.53 0.53 0.49

N 1152 1152 1152 1152 1152 1152

Notes: ^*** p<0.01, ^** p<0.05, ^* p<0.1. epr - Employment protection regular contracts, see notes to Table 2.1Table 6.2

Regarding regulations on the usage of temporary contracts, the results suggest that reforms were more effective in regulating temporary employment among tertiary educated, while we observe no significant effects among those with less than tertiary education (Table 6.8).

However, also the effects for tertiary educated are sensitive to the choice of control variables, and usually do not survive the inclusion of country-specific linear trends. We also again have to deal with sensitivity to sample composition: Dropping Italy yields statistically significant estimates across education groups, but only in the control variable based specification. Dropping both Italy and Belgium leaves no significant effects whatsoever.

Employment Protection and Temporary Employment

Table 6.8 Differences-in-differences estimates ("cluster robust" standard errors) of the effect of reforms of regulations on the usage of temporary contracts on temporary employment among young people, 15 Western countries, 1992-2006, heterogeneous reform effects

% on temporary contracts among employed

% on temporary contracts in labor force

% on temporary contracts in population

δftc (C) (T) (C) (T) (C) (T)

ISCED 0-2 -0.034 -0.013 -0.013 -0.004 -0.008 0.004

(0.029) (0.042) (0.036) (0.041) (0.039) (0.045)

ISCED 3-4 -0.032 -0.011 -0.025 -0.017 -0.037 -0.025

(0.022) (0.033) (0.027) (0.032) (0.027) (0.032)

ISCED 5-6 -0.043^* -0.022 -0.046^* -0.037 -0.059^*** -0.047^*

(0.020) (0.029) (0.022) (0.026) (0.019) (0.024)

Women 0.002 0.002 0.009 0.009 0.011 0.011

(0.007) (0.007) (0.008) (0.008) (0.008) (0.008)

R-sq 0.58 0.53 0.54 0.52 0.50 0.47

N 1152 1152 1152 1152 1152 1152

Notes: ^*** p<0.01, ^** p<0.05, ^* p<0.1. rtc - Regulations on the usage of temporary contracts, see notes to Table 2.1Table 6.2

Finally, we assess whether the deregulation of temporary contracts has led to stronger growth in temporary employment in countries where job security provisions on permanent contracts are particularly strict. The results are reported in Table 6.9. In the basic DiD specification, without controls, the interaction effects between reforms of temporary contracts and the level of employment protection of permanent employment contracts are generally insignificant. Adding control variables, the effect becomes significant in one instance only. However, the effect has the opposite sign of what we expected theoretically, suggesting that stricter regulations on temporary contracts raise temporary employment especially when regulations on permanent employment are strict, a result we already obtained in the fixed effects analysis in the preceding section. We further assessed the reverse interaction, i.e. whether reforms of job security provisions on regular contracts depend on the level of regulation on temporary contracts, but found no significant results.

Employment Protection and Temporary Employment

Table 6.9 Differences-in-differences estimates ("cluster robust" standard errors) of the effect of reforms of regulations on the usage of temporary contracts on temporary employment among young people, 15 Western countries, 1992-2006, consequences of "partial deregulation”

% on temporary contracts among employed

% on temporary contracts in labor force

% on temporary contracts in population

(C) (T) (C) (T) (C) (T)

δftc -0.014 0.001 -0.034^* -0.001 -0.018 0.001

(0.020) (0.028) (0.019) (0.027) (0.021) (0.027)

epr * δftc -0.000 0.057 0.004 0.053 0.060^* 0.068

(0.032) (0.036) (0.026) (0.037) (0.032) (0.040)

R-sq 0.58 0.53 0.55 0.52 0.50 0.47

N 1152 1152 1152 1152 1152 1152

Notes: ^*** p<0.01, ^** p<0.05, ^* p<0.1. epr - Employment protection regular contracts, rtc - Regulations on the usage of temporary contracts, see notes to Table 2.1Table 6.2