The impacts of the partial labor market reforms

Abstract

Organization for Economic Co-operation and Development (OECD) countries have started to implement a host of reforms aimed at increasing mobility and áexibility in the labor market. The partial labor market reforms have been processing to change the situation of new hires which are part of the temporary workforce, but making nearly no change in the situation of existing ones, permanent workforce. The aim of the thesis is to analyze the impacts of the partial labor market reforms for workers under temporary and permanent work contracts in an analytical and a descriptive framework. In the descriptive framework, áexicurity concept and its pathways are discussed. As a case study, the reforms and their impacts are investigated regarding of Spain and the Netherlands. Within the analytical framework, I propose the basic overlapping generations (OLG) model with human capital accumulation and heterogeneous agents. The tradeo§ between being a temporary worker and permanent worker depends positively on the capacity of the individual, and negatively on the rate of return on capital, the severance payment and the negative productivity shock. There is a stepping stone e§ect for unskilled senior labor under the condition of existence of the transition.