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Temporary contracts’ transitions: the role of training and institutions

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Despite recent reforms, labour market segmentation is still a marked feature of several European countries. This work empirically analyses transitions out of temporary contracts, by means of a discrete duration model, with a particular focus on human capital features, labour market protection and their interaction. Transitions to open-ended contracts with the same or with a new employer are considered separately, as well as transitions to joblessness, based on data for ten European countries taken from the European Community Household Panel. Firm-training significantly increases the likelihood of transitioning to an open-ended contract with the same employer, but not in countries with more segmented labor markets. In these countries, instead, educational attainment and labour market flexibility are more important determinants of transitions to open-ended contracts. Interestingly, in these countries, firm training actually mitigates the positive (and significant) impact of labour market flexibility on the likelihood of transitioning to an opened contract with the same employer.
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