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Escaping Social Pressure: Fixed-Term Contracts in Multi-Establishment Firms

Abstract : We develop a simple theoretical model showing that, by adding to the adjustment costs associated with permanent contracts, local social pressure against dismissals creates an incentive for CEOs to rely on fixed-term contracts, in an attempt to escape social pressure. Using linked employer-employee data, we show that establishments located closer to headquarters have higher shares of fixed-term contracts in hiring than those located further away whenever firms' headquarters are located in self-centered communities and the CEO not only works but also lives there. We show that these findings can only be explained by local social pressure.
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Preprints, Working Papers, ...
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Contributor : Christine Okret-Manville <>
Submitted on : Tuesday, March 23, 2021 - 4:32:40 PM
Last modification on : Friday, July 2, 2021 - 10:44:02 AM


Bassanini&al_IZA 14029.pdf
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  • HAL Id : hal-03177848, version 1


Andrea Bassanini, Eve Caroli, François Fontaine, Antoine Reberioux. Escaping Social Pressure: Fixed-Term Contracts in Multi-Establishment Firms. 2021. ⟨hal-03177848⟩



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