Jaramillo, M., Almonacid, J. y De la Flor, L. (2019). Los efectos desprotectores de la protección del empleo: el impacto de la reforma del contrato laboral de 2001. Lima: GRADE. Documentos de Investigación, 92.

Four out of every five labor relations in the formal sector of the Peruvian economy are covered by temporary contracts. This proportion is significantly higher than that of any country in the Organization for Economic Cooperation and Development (OECD), and higher than that of any Latin American country.

This publication presents the results of a study of the impact of the 2001 Constitutional Court ruling on the type of contract decisions used in the Peruvian labor market and its consequences on variables associated with workers’ welfare.

The central conclusion is that the reform is responsible for a reduction in the probability of a worker having an indefinite-term contract to one-fifth of what it was before the ruling. That is, in the absence of the reform, by 2015 there would have been between 926,000 and 936,000 more open-ended jobs than there were. As a consequence, workers lost around 6100 million soles in income during that year and 36,000 workers stopped joining a union.