Does subsidized part-time employment help unemployed workers to find full-time employment?

Tomi Kyyrä, José María Arranz y Carlos García Serrano:  “Does subsidized part-time employment help unemployed workers to find full-time employment?”. Labour Economics, vol. 56, pp. 68-93 (2019).

DOI: https://doi.org/10.1016/j.labeco.2018.12.001 .

Abstract:

We study whether part-time work acts as a bridge towards full-time work for unemployed workers in Spain. We consider a time period when firms were encouraged to create part-time jobs by cutting employers’ social security contributions. We follow the timing-of-event approach and estimate the causal effect of part-time work on the exit rate to full-time work using a multivariate duration model. We find that, after a cut in the hiring cost of part-timers, taking up a short part-time job reduced the expected time until next full-time job in the recession years. However, after an additional cut, part-time working has prolonged the expected time without a full-time job.

Keywords

Part-time employment, mixed proportional hazard model, stepping-stone effect, lock-in effect, indirect labour costs