Economy / Finance

Impact of taxing temporary job contracts

From VoxEU.org: Recent Articles
January 4, 2017 - 7:00pm

Temporary job contracts account for a substantial proportion of the workforce in countries such as France and Spain, but they can result in high job turnover and instability. This column assesses the impact of government policies that impose taxes on temporary contracts to induce employers to lengthen job durations. Taxation of temporary contracts has a negative impact on the labour market, reducing the mean duration of jobs and decreasing job creation. The introduction of open-ended contracts with no termination cost for separations occurring at short tenure may be more effective.



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