Revisiting the stepping-stone hypothesis: Transitions from temporary to permanent contracts in Peru*

Abstract

This study seeks to gauge the extent to which temporary contracts function as stepping stones to permanent contracts and to distinguish intrafirm from interfirm contract conversions. Using 2012–2016 data from a Peruvian matched employer–employee database, the authors propose several measures of contract conversion and estimate duration models. Their findings show that only 7 per cent of fixed-term contracts are converted and that about half of the conversions occur in the same firm.