Jaramillo, M., Almonacid, J. y De La Flor, L. (2017). Los efectos desprotectores de la protección del empleo: el impacto de la reforma del contrato laboral del 2001 (Avances de Investigación N° 30). Lima: GRADE.

Four out of every five labor relations in the formal sector of the Peruvian economy are covered by temporary contracts. This proportion is grossly higher than that of any OECD country and also considerably higher than that of any of the countries in our Latin American region. The purpose of this study is to elucidate the role of the 2001 labor reform on these results and to estimate the effects this has had on variables associated with workers’ welfare. We find that the reform has reduced the probability of having an indefinite-term contract in the Peruvian labor market. The average impact in the short term (up to five years after the reform) is a 50 percent reduction in this probability while the long-term impact is an 80 percent drop. This means that as of 2015 just over 900,000 jobs that would have been indefinite-term in the absence of the reform were based on temporary contracts due to the reform. Estimates based on Mincer equations suggest that this has translated into a loss of labor income for workers in the order of 6.1 billion soles in 2015. Thus, the same 36,000 workers would have joined a union in the absence of the reform. The results call attention to the urgency for the Constitutional Court to review its position on the constitutional mandate of “adequate protection” against dismissal.