Front Matter Page
Fiscal Affairs Department
Authorized for distribution by Gerd Schwartz
Contents
I. Introduction
II. Regulatory Changes Brought About by the Introduction of the CNE
A. Advantages and Disadvantages of the New Contracts Relative to the CDD
B. Advantages and Disadvantages of the New Contracts Relative to the CDI
C. Substitution Between New and Preexisting Labor Contracts
III. Modeling the Labor Force Under Different Types of Contracts
A. The Labor Market Prior to Introducing New Labor Contracts
B. The Labor Market After Introducing New Labor Contracts
IV. Evaluating the Impact of the New Labor Contracts
A. Calibration of the Model
B. Expected Impact in Job Creation
C. Expected Impact on Welfare and Labor Participation
D. Expected Impact on Unemployment
E. Robustness of Results
V. Conclusion: The Advantages of a Single Labor Contract?
Appendix: The Model
A. The Labor Market With CDD and CDI Contracts
B. The Labor Market After the Introduction of the CNE
C. Calibration
References
Tables
1. The Robustness of the Model Under Different Parameter Values
2. Baseline Parameter Values for the Simulation of the Model
Figures
1. The Structure of the Labor Market Before the Introduction of CNE-type Contracts
2. The Structure of the Labor Market After the Introduction of CNE-type Contracts
3. Employment Rate and Number of Net Jobs Created After the Reform With No Changes in the Participation Rate
4. Number of Net Jobs Created After the Reform for Firms With Less Than 20 Employees
5. Employment Rate and Number of Net Jobs Created After the Reform With Changes in the Participation Rate
6. Labor-Force and Participation Rate After the Reform
7. Unemployment Rate and Variation in the Number of Unemployed After the Reform With No Change in the Participation Rate
8. Unemployment and Variation in the Number of Unemployed After the Reform With a Change in the Participation Rate
9. Employment Rate, Unemployment Rate, Net Number of Jobs Created, and Variation in the Number of Unemployed Under an Alternative Reform