Moving Towards a Single Labour Contract.

Summary This paper discusses the pros and cons of a single labour contract. After reviewing the current state of dualism in labour markets. and the recent labour reforms in Europe, we discuss the various proposals to eliminate dualism. Next, we emphasise the costs of. dualism and discuss whether they would be addressed by introducing a single labour contract. We notably introduce a distinction. between reforms based on introducing a single contract with progressive seniority rights (CPSR) or a single contract with long. probation periods (CLPP).We argue that their gains and costs are very different, especially with regards to the stigma effects and. dualism. We also consider alternative reforms: the introduction of a single labour contract as such, and alternative reforms. independent of the labour contract but addressing the issue of dualism (training, access to housing and to credit) and compare their. costs and benefits. We then build a simple model where both temporary and permanent contracts are available to firms. We use it to describe the. demand for temporary contracts and the potential consequences of removing them and reach the following conclusions. First,. employment protection has a moderate negative impact on employment, which can be mitigated when temporary contracts are.