By: |
Andrea Bassanini (IZA - Institute for the study of labor - Institute for the Study of Labor - IZA, OECD - Organisation for Economic Cooperation and Development);
Eve Caroli (IZA - Institute for the Study of Labor - IZA, LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique);
François Fontaine (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, IZA - Institute for the Study of Labor - IZA);
Antoine Reberioux (LADYSS - Laboratoire Dynamiques Sociales et Recomposition des Espaces - UP1 - Université Paris 1 Panthéon-Sorbonne - UP8 - Université Paris 8 Vincennes-Saint-Denis - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique - UP - Université de Paris, UP - Université de Paris) |
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. |
Keywords: |
CEO reputation,Adjustment costs,Employment contracts,Social pressure |
Date: |
2021–03–23 |
URL: |
http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03177848&r=all |