TY  - RPRT
        AU  - Centeno, Mario
AU  - Novo, Alvaro A.
        TI  - Paying for Others' Protection: Causal Evidence on Wages in a Two-Tier System
        PY  - 2014/Dec/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 8702
        UR  - https://www.iza.org/publications/dp8702
        AB  - In a segmented labor market, theory predicts that employment protection has an asymmetric impact on entry and incumbent wages. We explore a reform that increased the protection of open-ended contracts for a well-defined subset of firms, while leaving it unchanged for other firms. The causal evidence points to a reduction in wages for new open-ended and fixed-term contracts and no impact for more tenured workers. The reductions estimated for entrants oscillate between -0.9 and -0.5 p.p., covering a significant part of the expected increase in firing costs. Firms with larger shares of fixed-term contracts shifted the burden to these workers.
        KW  - wages
KW  - two-tier systems
KW  - quasi-experiment
KW  - employment protection
        ER  -