Temporary Work in Turbulent Times: The Swedish Experience



30

increase in θP in the sense that it requires a bigger increase in profitability (decline in wages or increase
in productivity) to maintain zero profits on new vacancies. The reason is that a rise in the expected
duration of vacancies, 1/
q()j = (θj )η, is more costly the higher the separation rates are. Clearly, only
temporary contracts will be offered for
w/y1 -φc ;as w/y falls below 1 -φc , permanent contracts are
also offered. As illustrated in the figure, the demand for permanent contracts may eventually exceed the
demand for permanent contracts for sufficiently high rates of profitability.

Figure A1. The Demand for Temporary and Permanent Contracts.

w/y


By using (A1) and (A2) we can express the ratio between vacancies pertaining to temporary and
permanent contracts as follows:
where we have used the fact that
θT /θP = vT /vP . Note that this relative vacancy ratio is increasing in
w/y, i.e., decreasing in profitability. To obtain an expression involving the number of employed workers
we use the flow equilibrium relationships. For temporary jobs we have:
qTvT = λT , where T is the
number of workers on temporary contracts. For workers on permanent contracts the analogous expression
is:
qpV = λP . We thus obtain: T/P = (φ/λ)(vτ /vp)1-η . It is clear that the ratio T/P (as well as

(A3)


vT
vP


Γ( r+φ) kY1+

V r + λ ʌ


φc

1 - φc - ( w / y )


TP

v / v ) is declining in profitability.



More intriguing information

1. EDUCATIONAL ACTIVITIES IN TENNESSEE ON WATER USE AND CONTROL - AGRICULTURAL PHASES
2. Before and After the Hartz Reforms: The Performance of Active Labour Market Policy in Germany
3. Tissue Tracking Imaging for Identifying the Origin of Idiopathic Ventricular Arrhythmias: A New Role of Cardiac Ultrasound in Electrophysiology
4. Constructing the Phylomemetic Tree Case of Study: Indonesian Tradition-Inspired Buildings
5. The name is absent
6. The name is absent
7. The name is absent
8. Eigentumsrechtliche Dezentralisierung und institutioneller Wettbewerb
9. A THEORETICAL FRAMEWORK FOR EVALUATING SOCIAL WELFARE EFFECTS OF NEW AGRICULTURAL TECHNOLOGY
10. On Social and Market Sanctions in Deterring non Compliance in Pollution Standards
11. Une nouvelle vision de l'économie (The knowledge society: a new approach of the economy)
12. CROSS-COMMODITY PERSPECTIVE ON CONTRACTING: EVIDENCE FROM MISSISSIPPI
13. Parent child interaction in Nigerian families: conversation analysis, context and culture
14. The name is absent
15. Draft of paper published in:
16. The name is absent
17. Sector Switching: An Unexplored Dimension of Firm Dynamics in Developing Countries
18. Retirement and the Poverty of the Elderly in Portugal
19. Wounds and reinscriptions: schools, sexualities and performative subjects
20. Aktive Klienten - Aktive Politik? (Wie) Läßt sich dauerhafte Unabhängigkeit von Sozialhilfe erreichen? Ein Literaturbericht