Failing Young and Temporary Workers? The Impact of a Disruptive Crisis on a Dual Labour Market

Abstract

Abstract We study the impact of the pandemic crisis using monthly data covering the universe of individuals registered as unemployed in mainland Portuguese municipalities, complemented with electronic payments, linked employer–employee data, and furlough records. Event study designs identify a sharp increase in unemployment, driven mostly by termination of temporary contracts, and a decrease in new job placements. With triple difference-in-differences, we show that the effects are stronger in more dual municipal labour markets, i.e. with a higher share of temporary jobs, concentrated in young workers and middle educated individuals. The asymmetries are exacerbated by the duality of the municipal labour market.