The Dynamics of Schooling Attainments and Employment Contracts in the Early Career

François Poinas (Ecole Polytechnique)

March 17, 2010, 15:30–17:00


Room Amphi Colloque

Department Seminar


We investigate the role played by educational attainments on the employment contract transitions in the early career. We estimate a flexible reduced-form dynamic model of education choices and employment contract outcomes of the first two employment spells in the labor market. More precisely, we model the conversion of the first Fixed Term Contract (FTC) into a Permanent Contract (PC), distinguishing between intra and inter-firm transitions and incorporating the possible occurrence of an unemployment spell after the first FTC. We find that accepting a first FTC has a positive impact on the probability of employment in a PC, except for a limited set of the population endowed with particular schooling attainments and unobserved characteristics. Schooling attainments explain one third of the variance in the probability of PC employment at the beginning of the first employment spell. The explanatory power of schooling decreases significantly to explain the probability of conversion of a first long FTC into a PC in the same firm, whereas it remains stable to explain external PC outcomes. These results are consistent with the presence of asymmetric employer learning on young workers’ ability.

JEL codes

  • D83: Search • Learning • Information and Knowledge • Communication • Belief
  • I21: Analysis of Education
  • J24: Human Capital • Skills • Occupational Choice • Labor Productivity
  • J41: Labor Contracts
  • J62: Job, Occupational, and Intergenerational Mobility


François Poinas (Ecole Polytechnique), The Dynamics of Schooling Attainments and Employment Contracts in the Early Career, Department Seminar, Toulouse: TSE, March 17, 2010, 15:30–17:00, room Amphi Colloque.